By Obas Esiedesa
The Nigerian Extractive Industries Transparency Initiative (NEITI) has disclosed that the three tiers of government shared a total of ₦6 trillion from the Federation Account in the third quarter of 2025.
NEITI made this known in its Quarterly Review of the Federation Account Allocation Committee (FAAC) Disbursements, describing the figure as historic. The amount includes payments of 13 per cent derivation to oil-producing states.
According to the report, year-on-year FAAC allocations in 2025 grew by 55.6 per cent compared with the third quarter of 2024, more than doubling allocations over a two-year period.
A breakdown of the disbursements showed that the Federal Government received ₦2.19 trillion, states received ₦1.97 trillion, while local governments got ₦1.45 trillion.
The review further revealed that statutory revenues accounted for 62 per cent of total shared receipts, Value Added Tax (VAT) contributed 34 per cent, while the Electronic Money Transfer Levy (EMTL) and augmentation from non-oil excess revenue accounted for 2 per cent each.
NEITI explained that allocations to the 36 states were drawn from statutory revenue, VAT, EMTL and the Ecological Fund. In addition, states received an extra ₦100 billion as augmentation from the non-oil excess revenue account.
Lagos State recorded the highest allocation at ₦179.3 billion for the quarter, translating to an average monthly receipt of ₦59.76 billion. Kano State followed with ₦79.2 billion, while Rivers State received ₦78.8 billion.
Nasarawa State received the lowest allocation at ₦42.5 billion, followed by Ebonyi (₦42.9 billion) and Ekiti (₦43 billion). The data showed that the gap between the highest and lowest state allocations stood at ₦136.8 billion.
NEITI also disclosed that nine oil-producing states received ₦424 billion as 13 per cent derivation revenue during the quarter. This significantly altered state rankings, with derivation states accounting for nearly half of total FAAC allocations. Among them, Delta State recorded the highest allocation at ₦180.68 billion, followed by Akwa Ibom, Bayelsa and Rivers states.
On deductions, NEITI reported that ₦225.89 billion was deducted from states’ allocations to service debts and other obligations, 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 (26.5 per cent), while Cross River ranked third.
Looking ahead to the fourth quarter of 2025, NEITI noted that early indicators show lower average oil prices and slightly higher exchange rates compared with Q3. 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. If sustained, these trends could reduce distributable revenues in the quarter.
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 occurred in August 2024.
Commenting on the report, NEITI Executive Secretary, Mr. Musa Sarkin Adar, welcomed the strong remittance performance and reduction in states’ debt burdens, but cautioned that volatility in global oil markets and optimistic budget benchmarks could pose risks to fiscal sustainability.
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