Nigeria’s N6 trillion FAAC disbursement in Q3 2025 marks record high; states urged to use funds for development projects

Nigeria’s Federation Account recorded its highest quarterly disbursement in the third quarter of 2025, with N6 trillion shared among the three tiers of government, according to the Nigerian Extractive Industries Transparency Initiative (NEITI).

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The figures, published in NEITI’s Quarterly Review for Q3 2025, represent a 55.6 per cent year-on-year increase compared with the same period in 2024, and more than a twofold rise in allocations over the past two years.

NEITI disclosed that the Federation Account Allocation Committee (FAAC) distributed a total of N9.62 trillion between September and November 2025.

Governor Sheriff Oborevwori of Delta State urged all governors to prioritise the welfare of their people, noting that states now have increased resources to fund development projects.

He made the comments during the flag-off of the N39.3 billion Otovwodo flyover project in Ughelli North Local Government Area.

The N6 trillion disbursement included 13 per cent derivation payments to oil-producing states, underscoring the continued dominance of oil revenues in national allocations.

The federal government received N2.19 trillion, state governments N1.97 trillion, and local governments N1.45 trillion.

NEITI’s analysis indicated that statutory revenue contributed 62 per cent of the total shared receipts, while Value Added Tax (VAT) made up 34 per cent.

The Electronic Money Transfer Levy and non-oil excess revenue each accounted for two per cent.

State allocations varied widely.

Lagos State received the highest share at N179.3 billion, averaging N59.76 billion per month, followed by Kano with N79.2 billion and Rivers State with N78.8 billion.

At the lower end, Nasarawa, Ebonyi, and Ekiti received N42.5 billion, N42.9 billion, and N43 billion respectively, highlighting a N136.8 billion gap between the highest and lowest allocations.

Among oil-producing states, Delta recorded the highest gross allocation at N180.68 billion, with Akwa Ibom, Bayelsa, and Rivers also benefiting significantly from derivation inflows, which totalled approximately N424 billion for the period.

On debt obligations, NEITI reported that deductions from states’ allocations to service debts amounted to N225.89 billion, a 6.5 per cent decline from the previous quarter.

The average debt service ratio stood at 9.4 per cent, with over two-thirds of states recording ratios below 10 per cent, suggesting improving subnational debt sustainability.

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Despite the record inflows, NEITI cautioned of potential fiscal risks in the fourth quarter of 2025, citing a decline in average oil prices and crude oil production from 1.64 million barrels per day in Q3 to 1.59 million barrels per day in the first month of Q4.