The Federal Government, states and local governments shared a record ₦6 trillion in Federation Account Allocation Committee (FAAC) disbursements in the third quarter of 2025, the Nigeria Extractive Industries Transparency Initiative (NEITI) has revealed.
The disclosure was made on Tuesday in NEITI’s analysis of FAAC allocations for Q3 2025. A breakdown showed that the Federal Government received ₦2.19 trillion, states got ₦1.97 trillion, while local governments received ₦1.45 trillion.
In a statement issued in Abuja by NEITI’s Director of Communication and Stakeholders Management, Obiageli Onuorah, the organisation described the figures as a historic surge in federation account receipts and distributions.
According to the NEITI Quarterly Review, the ₦6 trillion allocation, which includes 13 per cent derivation payments to oil-producing states, represents a 55.6 per cent year-on-year increase compared with Q3 2024, more than doubling allocations over the past two years.
The review showed that statutory revenues accounted for 62 per cent of the shared receipts, while Value Added Tax (VAT) contributed 34 per cent. The Electronic Money Transfer Levy (EMTL) and augmentation from non-oil excess revenue accounted for 2 per cent each.
Distributions to the 36 states were drawn from statutory revenues, VAT, EMTL and ecological funds, with states also receiving an additional ₦100 billion as augmentation from the non-oil excess revenue account.
State-by-state analysis indicated that Lagos State recorded the highest allocation at ₦179.3 billion for the quarter, translating to an average monthly receipt of ₦59.76 billion. Kano State followed with ₦79.2 billion, while Rivers State ranked third with ₦78.8 billion.
At the lower end, Nasarawa State received ₦42.5 billion, Ebonyi ₦42.9 billion, and Ekiti ₦43 billion. NEITI noted that the average monthly allocation to Nasarawa stood at ₦14.1 billion, highlighting a ₦136.8 billion gap between the highest and lowest state allocations.
The report further noted that Lagos’ ₦179 billion allocation was more than double the amounts received by Kano and Rivers, the second and third highest-grossing states.
According to NEITI, nine oil-producing states received a combined ₦424 billion as 13 per cent derivation revenue during the quarter, significantly altering the ranking of states and accounting for nearly half of total FAAC allocations. Among them, Akwa Ibom, Bayelsa, Delta and Rivers emerged as standouts, with Delta State recording the highest gross allocation at ₦180.68 billion.
NEITI also disclosed that deductions from states’ allocations for debt servicing and other obligations amounted to ₦225.89 billion, representing a 6.5 per cent decline from the previous quarter. The average debt service ratio across states stood at 9.4 per cent, ranging from 1.5 per cent to 26.8 per cent.
About one-third of the states recorded debt service ratios below 5 per cent, while more than two-thirds were below 10 per cent. Ogun State topped the chart with a ratio of 26.8 per cent, closely followed by Lagos at 26.5 per cent, while Cross River ranked third.
Looking ahead to Q4 2025, NEITI said early indicators point to lower average oil prices and slightly higher exchange rates compared with Q3. Average daily crude oil production stood at 1.64 million barrels per day in Q3, but dropped to 1.59 million barrels per day in the first month of Q4.
According to the agency, if these trends persist, they could reduce foreign exchange-denominated inflows and lead to lower distributable revenues in the fourth quarter of 2025.
The report also noted that derivation revenue from the solid minerals sector was unavailable for distribution, as it was negligible and insufficient. The last distribution from solid minerals revenues occurred in August 2024.
Commenting on the report, NEITI Executive Secretary, Dr. Sarkin Adar, welcomed the strong remittance performance and the reduction in states’ debt burdens, but warned about volatility in global oil markets and overly optimistic budget benchmarks.
“Though the Quarter 3 2025 FAAC results are encouraging, NEITI reiterates that the data presents an opportunity to the government to institutionalise prudent fiscal practices that will protect the gains that have been recorded so far in growing revenue and reduce vulnerability to commodity shocks,” Adar said.
He added: “The Q3 2025 FAAC results are encouraging, but windfalls must be managed with discipline. Greater transparency, realistic budgeting, and stronger stabilisation mechanisms will ensure these resources deliver durable benefits for all Nigerians.”
To strengthen fiscal resilience, NEITI recommended the publication of up-to-date balances and liabilities of key federation accounts, including the non-oil Excess Account, Domestic Excess Crude Account, Stabilisation Fund, Ecology Fund and other mineral resource-linked accounts.
“The publication should provide clear notes explaining FAAC transactions, refunds, net-offs, and priority project entries in order to enhance transparency in the inflows, allocations and disbursements from the federation accounts,” the agency advised.
NEITI further urged consistent application of Appropriation Act benchmarks in determining monthly distributable revenues, the use of the Stabilisation Account to smooth disbursements, and the transfer of exchange gains into stabilisation buffers.
The organisation called on the Office of the Accountant General of the Federation, the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), FAAC, the National Economic Council (NEC), the National Assembly and state governments to act on its recommendations to improve transparency, accountability and long-term fiscal sustainability.
NEITI also advised governments at all levels to strengthen Nigeria’s sovereign wealth and stabilisation capacity through regular transfers to the Nigeria Sovereign Wealth Fund, adopt more conservative budget benchmarks, and accelerate revenue diversification, particularly through reforms in the mining and petroleum sectors.
