Nigeria Records Highest Federation Account Disbursements Of N6trn In Q3 2025 – NEITI
By Gift Eguavoen
Nigeria recorded the highest Federation Account Allocation Committee (FAAC) disbursement of N6.0 trillion in Q3 2025, with a breakdown showing that the federal government received N2.19 trillion, states received N1.97 trillion and local governments received N1.45 trillion.
The figures are contained in the Nigerian Extractive Industries Transparency Initiative (NEITI) latest Q3 2025 Quarterly Review of FAAC Allocation and Disbursements to the Federation.
The report documented a historic rise in Federation Account receipts and distributions, improved state debt metrics, and a set of policy priorities to protect fiscal stability heading into Q4 2025.
The Report which showed record total FAAC disbursements of N6.0 trillion to the federation, including 13 percent payments to derivative states, also showed a 55.6 percent growth in year on year Quarterly FAAC allocations in Q3 2025.
The Review also showed that Statutory revenues accounted for 62 percent of shared receipts, Value Added Tax (VAT) 34%, while Electronic Money Transfer Levy and augmentation from non-oil excess revenue each accounted for 2% respectively.
The distribution to the 36 states comprises of revenues from statutory sources, VAT, Electronic Money Transfer levy and Ecological fund. “States also received additional N100 Billion as augmentation from the non-oil excess revenue account,” the NEITI Review stated.
A breakdown of the allocations to states showed that Lagos State recorded the highest revenue at N179.3 billion for the quarter, translating to an average monthly receipt of N59.76 billion. Kano came second with N79.2 billion while Rivers State came third with N78.8 billion.
Nasarawa state received the lowest allocation of N42.5 billion followed by Ebonyi and Ekiti states with N42.9 billion and N43 billion respectively.
The Review further stated: “From the Quarterly Review, nine oil producing states received N424 billion as 13 percent derivation revenue. This materially altered state rankings in the review, throwing up the derivative states as receiving nearly half of the gross allocations from FAAC.
“A closer look at the derivative disbursements showed the four oil bearing states – Akwa Ibom, Bayelsa, Delta and Rivers States in the stand-out region, with Delta state grossing the highest in revenue allocation of N180.68Billion.”
NEITI also revealed that the deductions from states’ allocations to service debt and other obligations totaled N225.89 billion, which indicates a 6.5 percent decline from the previous quarter. The average debt service ratio across states was 9.4 percent with individual state ratios ranging from 1.5 percent to 26.8 percent.
“However, about one-third of the states have a debt service ratio of less than 5%, while more than two-thirds have a ratio of less than 10%. Ogun State, with a ratio of 26.8%, topped the chart, closely followed by Lagos (26.5%), and Cross River ranked third,” the NEITI report disclosed.
On the outlook for Q4 2025, NEITI Quarterly Review noted that early Quarter 4 indicators show lower average oil prices and slightly higher exchange rates compared with Quarter 3 figures. 1.64 million barrels per day was recorded as average daily crude oil production in Q3 while 1.59 million barrels per day was recorded against the first month of Q4.
“These developments, if sustained, could reduce foreign exchange denominated inflows and lead to lower distributable revenues in Q4 of 2025,” the Review added.
The NEITI report also disclosed that derivation revenue from the solid minerals sector was unavailable for distribution to Federation Account beneficiaries because it was negligible and insufficient for distribution. The last distribution of revenues from solid minerals occurred in August 2024.
The Executive Secretary of NEITI, Hon Musa Sarkin Adar, welcomed the strong remittance performance and the reduction in states’ debt burden. Adar however, drew attention to the volatility in oil markets and optimistic budget benchmarks which may pose risks to fiscal sustainability.
To protect gains and strengthen fiscal resilience, NEITI recommended the publication of up-to-date balances and liabilities for 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 other to enhance transparency in the inflows, allocations and disbursements from the federation accounts,” the Review said, while pointing out the need to apply the Appropriation Act benchmarks consistently when determining monthly distributable revenues and transfer exchange gains into stabilisation buffers.
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