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By Uche Usim
Nigeria’s Federation Account Allocation Committee (FAAC) disbursed a record N6 trillion In the third quarter of 2025, marking the highest quarterly allocation in history, the Nigerian Extractive Industries Transparency Initiative (NEITI) has revealed.
The figure, which includes 13 percent derivation payments to oil-producing states, represents a 55.6 per cent increase year-on-year and more than doubles allocations over the past two years.
Breaking down the disbursements, the federal government received N2.19 trillion, states got N1.97 trillion, and local governments received N1.45 trillion. Statutory revenues accounted for 62 percent of shared receipts, while Value Added Tax (VAT) contributed 34 percent, and Electronic Money Transfer Levy (EMTL) and non-oil excess revenue augmentation each added 2 percent.
Among the states, Lagos led with N179.3 billion, averaging N59.76 billion monthly, more than double that of the next highest recipients, Kano (N79.2 billion) and Rivers (N78.8 billion). Nasarawa recorded the lowest allocation at N42.5 billion, followed by Ebonyi (N42.9 billion) and Ekiti (N43 billion), showing a N136.8 billion gap between the highest and lowest states.
NEITI noted that the nine oil-producing states received N424 billion in 13 percent derivation revenue, nearly half of which went to the four top states: Delta, Rivers, Akwa Ibom, and Bayelsa. Delta led the group with N180.68 billion, reshaping the revenue rankings in the quarter.
On debt management, states collectively deducted N225.89 billion from their allocations to service debt, a 6.5 percent decline from the previous quarter. Average state debt service stood at 9.4 percent, with Ogun topping at 26.8 percent, followed closely by Lagos (26.5 percent) and Cross River. About one-third of states had ratios below 5 percent, while over two-thirds were under 10 percent.
With regards to Q4 2025, NEITI highlighted early indicators of lower oil prices and slightly higher exchange rates, noting that average daily crude production fell slightly from 1.64 million barrels per day in Q3 to 1.59 million barrels per day in early Q4. These trends could reduce foreign exchange inflows and lower distributable revenues. NEITI also reported that solid minerals derivation revenue was negligible and unavailable for distribution, last recorded in August 2024.
Welcoming the strong performance but cautioning against volatility, NEITI Executive Secretary Musa Sarkin Adar said: “The Q3 2025 FAAC results are encouraging, but windfalls must be managed with discipline. Greater transparency, realistic budgeting, and stronger stabilization mechanisms will ensure these resources deliver durable benefits for all Nigerians.”
NEITI urged the government to enhance fiscal resilience by publishing up-to-date balances and liabilities for key federation accounts, applying Appropriation Act benchmarks consistently, and transferring exchange gains into stabilization buffers. The agency also called for regular contributions to the Nigeria Sovereign Wealth Fund, conservative budgeting assumptions for crude oil production and prices, and accelerated reforms in mining, downstream petroleum, and domestic refining under the Petroleum Industry Act.
The review emphasized that prudent fiscal practices can protect revenue gains, reduce vulnerability to commodity shocks, and ensure the historic inflows from FAAC benefit all Nigerians.
