The Nigerian Extractive Industries Transparency Initiativ has disclosed that the Federal Government, states and local governments shared a total of N6 trillion from the Federation Account in the third quarter of 2025.
The disclosure was made in NEITI’s Quarterly Review of the Federation Account Allocation Committee disbursements, where the agency described the amount shared during the period as historic. The figure includes payments of 13 per cent derivation revenue to oil-producing states.
According to the report, year-on-year FAAC allocations in 2025 increased by 55.6 per cent when compared with the third quarter of 2024, indicating that total allocations have more than doubled over a two-year period.
A detailed breakdown of the disbursements showed that the Federal Government received N2.19 trillion, state governments collectively received N1.97 trillion, while local governments were allocated N1.45 trillion during the quarter.
The review further revealed that statutory revenues accounted for 62 per cent of the total amount shared, Value Added Tax contributed 34 per cent, while the Electronic Money Transfer Levy and augmentation from non-oil excess revenue each accounted for 2 per cent.
NEITI explained that allocations to the 36 states were derived from statutory revenue, VAT, EMTL and the Ecological Fund. In addition to these sources, states also received an extra N100 billion as augmentation from the non-oil excess revenue account.
An analysis of state allocations showed that Lagos State received the highest share at N179.3 billion in the quarter, translating to an average monthly allocation of N59.76 billion. Kano State followed with N79.2 billion, while Rivers State received N78.8 billion.
At the lower end of the scale, Nasarawa State received the lowest allocation at N42.5 billion, followed by Ebonyi State with N42.9 billion and Ekiti State with N43 billion. The data indicated that the difference between the highest and lowest state allocations stood at N136.8 billion.
NEITI also disclosed that nine oil-producing states received a combined N424 billion as 13 per cent derivation revenue during the quarter. This significantly reshaped the ranking of states, with derivation-receiving states accounting for nearly half of total FAAC allocations. Among them, Delta State recorded the highest allocation at N180.68 billion, followed by Akwa Ibom, Bayelsa and Rivers states.
On deductions, the report showed that N225.89 billion was deducted from states’ allocations to service debts and meet other obligations, representing a 6.5 per cent decline compared with the previous quarter. The average debt service ratio across states stood at 9.4 per cent, with ratios ranging from as low as 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 State at 26.5 per cent, while Cross River State ranked third in terms of the proportion of allocations used for debt servicing.
Looking ahead to the fourth quarter of 2025, NEITI noted that early indicators point to lower average crude oil prices and slightly higher exchange rates compared with the third quarter. It added that average daily crude oil production stood at 1.64 million barrels per day in Q3 but declined to 1.59 million barrels per day in the first month of Q4, a trend that could reduce distributable revenues if sustained.
The report also stated that derivation revenue from the solid minerals sector was unavailable for distribution due to negligible earnings, noting that the last such distribution from the sector occurred in August 2024.
Commenting on the findings, NEITI Executive Secretary, Musa Sarkin Adar, welcomed the strong remittance performance and the reduction in states’ debt burdens, but cautioned that volatility in global oil markets and optimistic budget benchmarks could pose risks to Nigeria’s fiscal sustainability.
