Lagos receives N179bn as oil-producing states share N424bn from FAAC’s N6tr payout

Nigeria recorded its highest quarterly federation account disbursement in the third quarter of 2025, with allocations rising to N6 trillion, according to data released by the Nigerian Extractive Industries Transparency Initiative (NEITI). The surge underscores a sharp increase in shared revenues but also highlights emerging fiscal risks as crude oil prices soften and production declines.

NEITI’s Quarterly Review for Q3 2025 showed that the allocation represented a 55.6 per cent increase year-on-year and more than double the amount shared over the same period two years earlier. Between September and November 2025 alone, a total of N9.62 trillion was distributed by the Federation Account Allocation Committee (FAAC).

Reacting to the inflows, Delta State Governor, Sheriff Oborevwori, urged state governors to improve the welfare of citizens, saying claims that there was no money were no longer tenable. He spoke during the flag-off of the N39.3 billion Otovwodo Flyover project in Ughelli North Local Government Area.

The N6 trillion shared in the third quarter included 13 per cent derivation payments to oil-producing states, reflecting the continued dependence of federation revenues on oil inflows. Of the total amount, the Federal Government received N2.19 trillion, state governments N1.97 trillion, while local governments got N1.45 trillion.

NEITI disclosed that statutory revenues accounted for 62 per cent of the shared funds, while Value Added Tax (VAT) contributed 34 per cent. The Electronic Money Transfer Levy (EMTL) and augmentation from non-oil excess revenue contributed two per cent each. An additional N100 billion augmentation from the non-oil excess revenue account further boosted allocations to states.

A breakdown of state allocations showed significant disparities. Lagos State received the highest allocation at N179.3 billion for the quarter, averaging N59.76 billion monthly. Kano followed with N79.2 billion, while Rivers received N78.8 billion. At the bottom of the scale were Nasarawa with N42.5 billion, Ebonyi with N42.9 billion and Ekiti with N43 billion, translating to an average monthly inflow of about N14.1 billion for Nasarawa. The gap between the highest and lowest state allocations stood at N136.8 billion.

Among oil-producing states, Delta recorded the highest gross allocation at N180.68 billion, alongside Akwa Ibom, Bayelsa and Rivers as major beneficiaries of derivation revenues during the period. Collectively, oil-producing states received about N424 billion from FAAC in the quarter.

On debt obligations, NEITI reported that deductions from state allocations to service debts and other commitments totalled N225.89 billion, representing a 6.5 per cent decline from the previous quarter. The average debt service ratio stood at 9.4 per cent, with about one-third of states recording ratios below five per cent and more than two-thirds below 10 per cent, indicating improved subnational debt sustainability.

Despite the record inflows, NEITI warned of mounting fiscal pressure in the final quarter of 2025, citing declining oil prices and reduced crude output. Average daily crude oil production fell from 1.64 million barrels per day in Q3 to 1.59 million barrels per day in the first month of Q4, a trend that could weaken foreign exchange inflows and future distributable revenues if sustained.

Separately, the National Bureau of Statistics (NBS) disclosed in its FAAC Allocation Reports for September to November 2025 that N3.64 trillion was disbursed in September, N3.05 trillion in October and N2.93 trillion in November. The amounts comprised N2.16 trillion from the statutory account, N49.87 billion from EMTL and N719.83 billion from VAT.

The NBS also reported that N141.39 billion was shared among oil-producing states as 13 per cent derivation, while revenue-generating agencies, including the Nigeria Customs Service, Federal Inland Revenue Service and Nigerian Upstream Petroleum Regulatory Commission, received N29.64 billion, N50.71 billion and N34.92 billion respectively as cost of revenue collection.