iDeemlawfulNigeria’s federation account recorded its highest quarterly disbursement in the third quarter of 2025, with total allocations rising to N6 trillion, reflecting a sharp increase in shared revenues but also highlighting growing fiscal risks as oil prices soften and crude production declines toward the final quarter of the year.
The figures were released yesterday by the Nigerian Extractive Industries Transparency Initiative (NEITI) in its Quarterly Review for Q3 2025, which showed a 55.6 per cent year-on-year rise compared with the same period in 2024 and more than a twofold increase over a two-year span.
With N9.62 trillion shared by the Federation Account Allocation Committee (FAAC) between September and November, Delta State Governor Sheriff Oborevwori urged fellow governors to improve the welfare of citizens as states receive increased funding.
The N6 trillion figure includes 13 per cent derivation payments to oil-producing states, underscoring the magnitude of oil-related inflows sustaining federation revenues.
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A breakdown of the allocation showed that the Federal Government received N2.19 trillion, state governments got N1.97 trillion, while local governments received N1.45 trillion, pointing to broad growth in statutory transfers across all levels of government.
While noting that states now receive higher federation allocations, the Delta governor added that “some people” should stop claiming there is no money.
Oborevwori made the remarks during the flag-off ceremony of the N39.3 billion Otovwodo flyover project in Ughelli North Local Council, insisting there was no justification for withholding the truth from Nigerians, as state governments now have adequate resources.
NEITI’s analysis showed that statutory revenue made up 62 per cent of the shared funds, while Value Added Tax (VAT) accounted for 34 per cent. The Electronic Money Transfer Levy (EMTL) and augmentation from non-oil excess revenue contributed two per cent each, reflecting the continued dominance of oil and tax receipts.
The distribution to the 36 states, sourced from statutory revenue, VAT, EMTL and the Ecological Fund, also included an extra N100 billion augmentation from the non-oil excess revenue account, further lifting quarterly inflows to subnational governments.
State-level data revealed significant disparities, with Lagos receiving the highest allocation of N179.3 billion for the quarter, translating to an average monthly inflow of N59.76 billion. Kano followed with N79.2 billion, while Rivers received N78.8 billion.
At the lower end, Nasarawa received N42.5 billion, Ebonyi N42.9 billion, and Ekiti N43 billion. NEITI noted that Nasarawa’s allocation averaged N14.1 billion monthly, with the difference between the highest and lowest state allocations standing at N136.8 billion in Q3.
The data further showed that Lagos’s N179 billion allocation was more than twice the amounts received by Kano and Rivers, the second- and third-highest recipients.
Among oil-producing states, Delta recorded the highest gross allocation of N180.68 billion, alongside Akwa Ibom, Bayelsa and Rivers as major beneficiaries of derivation inflows during the period.
On debt obligations, NEITI disclosed that deductions from state allocations for debt servicing and other commitments amounted to N225.89 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.
The data showed that about one-third of states recorded debt service ratios below five per cent, while more than two-thirds remained under 10 per cent, indicating improving debt sustainability at the subnational level.
Despite the record inflows, NEITI cautioned that early signals for Q4 2025 suggest increasing fiscal pressure, citing lower average oil prices and slightly higher exchange rates compared with Q3.
Average daily crude oil output declined from 1.64 million barrels per day in Q3 to 1.59 million barrels per day in the first month of Q4, a trend NEITI warned could reduce foreign exchange earnings and distributable revenue if sustained.
The National Bureau of Statistics (NBS), in its FAAC Allocation Reports for September to November 2025 released yesterday, disclosed that FAAC disbursed N3.64 trillion in September, N3.05 trillion in October and N2.93 trillion in November.
According to NBS, the amounts comprised N2.16 trillion from the Statutory Account, N49.87 billion from EMTL and N719.83 billion from VAT.
The NBS report further showed that N141.39 billion was shared among oil-producing states from the 13 per cent derivation fund, while revenue-generating agencies—the Nigeria Customs Service (NCS), Federal Inland Revenue Service (FIRS) and Nigerian Upstream Petroleum Regulatory Commission (NUPRC)—received N29.64 billion, N50.71 billion and N34.92 billion respectively as cost of revenue.