Nigeria recorded a historic N6.0 trillion in Federation Account Allocation Committee (FAAC) disbursements in the third quarter (Q3) of 2025, according to a new analysis released by the Nigerian Extractive Industries Transparency Initiative (NEITI).
The figures, contained in NEITI’s Quarterly Review of FAAC Allocations and Disbursements for Q3 2025, reflect a sharp rise in federation revenues, improved debt metrics at the subnational level, and highlight policy priorities aimed at safeguarding fiscal stability ahead of the fourth quarter of the year.
Total FAAC disbursements for the quarter stood at N6.0 trillion, inclusive of 13 per cent derivation payments to oil-producing states. This represents a 55.6 per cent year-on-year increase compared with Q3 2024, more than doubling total quarterly allocations over the past two years.
A breakdown of the allocations shows that the Federal Government received N2.19 trillion, state governments N1.97 trillion, and local governments N1.45 trillion. Statutory revenues accounted for 62 per cent of the shared receipts, while Value Added Tax (VAT) contributed 34 per cent. Proceeds from the Electronic Money Transfer Levy (EMTL) and augmentation from the Non-Oil Excess Revenue Account also supported the distribution.
Allocations to the 36 states comprised statutory revenues, VAT, EMTL and Ecological Fund proceeds, with an additional N100 billion received as augmentation from the non-oil excess revenue account.
Lagos State emerged as the highest beneficiary, receiving N179.3 billion during the quarter, equivalent 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, Nasarawa State received N42.5 billion, Ebonyi N42.9 billion, and Ekiti N43 billion.
The data show an average monthly allocation of N14.1 billion to Nasarawa State, with a gap of N136.8 billion between the highest- and lowest-receiving states. Lagos’ allocation was more than double the combined receipts of Kano and Rivers.
According to the review, nine oil-producing states received a total of N424 billion as 13 per cent derivation revenue during the quarter, significantly reshaping the allocation rankings. The four major oil-producing states — Akwa Ibom, Bayelsa, Delta and Rivers — dominated derivation receipts, with Delta State recording the highest allocation at N180.68 billion.
NEITI also disclosed that deductions from states’ allocations for debt servicing and other obligations 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, with ratios ranging from 1.5 per cent to 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. Overall, about two-thirds of the states posted debt service ratios below 10 per cent, reflecting improving fiscal conditions at the subnational level.
Looking ahead, NEITI warned of potential pressure on revenues in Q4 2025, citing lower average crude oil prices, slightly higher exchange rates, and a decline in oil production. Average daily crude oil output fell from 1.64 million barrels per day in Q3 to 1.59 million barrels per day in the first month of Q4.
The agency also noted that derivation revenue from the solid minerals sector remained negligible, with the last distribution recorded in August 2024.
Commenting on the report, NEITI Executive Secretary, Musa Sarkin Adar, welcomed the strong remittance performance and easing debt burden on states but cautioned against fiscal complacency amid oil market volatility and optimistic budget assumptions.
He called for greater transparency through the publication of up-to-date balances and liabilities of key federation accounts, consistent application of Appropriation Act benchmarks, and the strengthening of stabilisation buffers, including regular contributions to the Nigeria Sovereign Wealth Fund.
While describing the Q3 2025 FAAC performance as encouraging, NEITI stressed that the revenue gains present an opportunity for governments at all levels to entrench prudent fiscal practices and reduce exposure to commodity price shocks.
“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,” Sarkin Adar said.
