The Federal Government, 36 states and 774 local government councils shared a record ₦6tn from the Federation Account in the third quarter of 2025, the Nigerian Extractive Industries Transparency Initiative has said.
NEITI disclosed this in its Quarterly Review of the Federation Account Allocation Committee disbursements, describing the figure as the highest quarterly allocation in Nigeria’s fiscal history. The amount included payments of 13 per cent derivation to oil-producing states.
According to the report, total FAAC allocations in Q3 2025 rose by 55.6 per cent year-on-year compared with the same period in 2024, marking a dramatic surge that has more than doubled distributions over the past two years.
A breakdown showed that the Federal Government received ₦2.19tn, states shared ₦1.97tn, while local governments got ₦1.45tn within the three-month period.
NEITI said statutory revenues accounted for 62 per cent of total shared receipts, while Value Added Tax contributed 34 per cent. The Electronic Money Transfer Levy and augmentation from non-oil excess revenue each accounted for two per cent.
The review noted that allocations to states were drawn from statutory revenue, VAT, EMTL and the Ecological Fund, with an additional ₦100bn disbursed to states as augmentation from the non-oil excess revenue account.
On state-by-state allocations, Lagos recorded the highest receipt at ₦179.3bn in the quarter, translating to an average monthly inflow of ₦59.76bn. Kano followed with ₦79.2bn, while Rivers received ₦78.8bn.
At the lower end, Nasarawa got ₦42.5bn, Ebonyi ₦42.9bn and Ekiti ₦43bn, leaving a gap of ₦136.8bn between the highest- and lowest-receiving states.
NEITI also revealed that nine oil-producing states shared ₦424bn as 13 per cent derivation revenue during the quarter, significantly reshaping the ranking of states. With derivation inflows included, oil-producing states accounted for nearly half of total FAAC allocations.
Among them, Delta State topped the chart with ₦180.68bn, followed by Akwa Ibom, Bayelsa and Rivers states.
On deductions, the report said ₦225.89bn was deducted from states’ allocations to service debts and other obligations, representing a 6.5 per cent decline from the previous quarter.
The average debt service ratio stood at 9.4 per cent, with individual states ranging from 1.5 per cent to as high as 26.8 per cent.
Ogun State recorded the highest debt service ratio at 26.8 per cent, followed closely by Lagos at 26.5 per cent, while Cross River ranked third.
Looking ahead, NEITI warned that distributable revenues could soften in the fourth quarter of 2025 due to weaker fundamentals. It said early indicators point to lower average oil prices and slightly higher exchange rates compared with Q3.
Although average daily crude oil production stood at 1.64 million barrels per day in Q3, output dipped to 1.59 million barrels per day in the first month of Q4, a trend that could shrink FAAC inflows if sustained.
The agency also noted that derivation revenue from solid minerals was unavailable for distribution due to negligible earnings, adding that the last such payment was made in August 2024.
Commenting on the report, the NEITI Executive Secretary, Mr Musa Sarkin Adar, welcomed the strong remittance performance and easing debt pressures on states but cautioned that volatility in global oil markets and overly optimistic budget benchmarks could pose risks to Nigeria’s fiscal sustainability.
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