Nigeria recorded its highest-ever quarterly disbursement from the federation account in the third quarter of 2025, as total allocations surged to N6 trillion, underscoring a sharp rise in shared revenues even as warning signs emerge over weakening oil prices and declining crude output.
The figures were released by the Nigerian Extractive Industries Transparency Initiative (NEITI) in its Q3 2025 Quarterly Review, which showed a 55.6 per cent year-on-year increase compared with the same period in 2024 and more than a twofold rise over the last two years.
Within the three-month period from September to November, a total of N9.62 trillion was shared among the three tiers of government through the Federation Accounts Allocation Committee (FAAC). Reacting to the development, Delta State Governor, Sheriff Oborevwori, urged his fellow governors to translate the higher inflows into improved living conditions for Nigerians.
The N6 trillion allocation includes 13 per cent derivation funds paid to oil-producing states, highlighting the continued dominance of oil-related revenues in the federation account.
A breakdown of the disbursement shows that the Federal Government received N2.19 trillion, state governments N1.97 trillion, while local governments got N1.45 trillion, reflecting increased statutory transfers across all levels of government.
Speaking at the flag-off of the N39.3 billion Otovwodo flyover project in Ughelli North Local Government Area, Oborevwori dismissed claims that states were cash-strapped. “Some people should stop saying there is no money,” he said, adding that governments now have sufficient resources and should be transparent with citizens.
NEITI’s analysis revealed that statutory revenues accounted for 62 per cent of total shared receipts, while Value Added Tax (VAT) contributed 34 per cent. The Electronic Money Transfer Levy (EMTL) and non-oil excess revenue augmentation each contributed two per cent.
The distribution to the 36 states also included an additional N100 billion augmentation from the non-oil excess revenue account, further boosting subnational inflows during the quarter.
State-by-state data showed significant disparities in allocations. Lagos State received the highest share at N179.3 billion, averaging N59.76 billion monthly. Kano followed with N79.2 billion, while Rivers received N78.8 billion.
At the lower end, Nasarawa received N42.5 billion, Ebonyi N42.9 billion, and Ekiti N43 billion. NEITI noted that the gap between the highest and lowest state allocations stood at N136.8 billion during the quarter. Lagos’ allocation was more than double that of Kano and Rivers, the second and third highest recipients.
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 inflows.
On debt obligations, NEITI disclosed that deductions from states’ allocations for debt servicing 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 most states recording ratios below 10 per cent, suggesting improving debt sustainability at the subnational level.
Despite the record inflows, NEITI warned of mounting fiscal pressure in the final quarter of 2025. The agency cited softer oil prices, a slightly higher exchange rate, and a drop in average daily 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, trends that could reduce foreign exchange earnings and distributable revenues if sustained.
Meanwhile, the National Bureau of Statistics (NBS), in its FAAC Allocation Reports for September to November 2025 released yesterday, disclosed that N3.64 trillion was shared in September, N3.05 trillion in October and N2.93 trillion in November.
According to the NBS, the disbursements comprised N2.16 trillion from the statutory account, N49.87 billion from EMTL and N719.83 billion from VAT. Oil-producing states received N141.39 billion from the 13 per cent derivation fund, 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.