NEITI: At N6tn, Nigeria Posted Highest Federation Disbursement in Q3 2025

• Says allocations grew 55.6% y-o-y

• Oil-producing states receive N424bn in derivation

• Agency seeks policy action to safeguard fiscal gains

Emmanuel Addeh in Abuja

The Nigeria Extractive Industries Transparency Initiative (NEITI) yesterday released its analysis of the Federation Account Allocation Committee (FAAC) disbursements in Q3 2025, putting it at a record N6 trillion.

In a statement in Abuja by the Director of Communication & Stakeholders Management, Obiageli Onuorah, the organisation described it as a historic rise in federation account receipts and distributions, highlighting improved state debt metrics, and a set of policy priorities to protect fiscal stability.

The report contained in the agency’s Quarterly Review, said the N6 trillion included 13 per cent payments to derivative states, explaining that year-on-year quarterly FAAC allocations in 2025 grew by 55.6 per cent compared with Q3 of 2024, more than doubling allocations over a two-year period.

A breakdown of the disbursements showed that the federal government received N2.19 trillion, states received N1.97 trillion and local governments received N1.45 trillion.

The review also showed that statutory revenues accounted for 62 per cent of shared receipts, while Value Added Tax (VAT) was 34 per cent, and Electronic Money Transfer Levy (EMTL) and augmentation from non-oil excess revenue each accounted for 2 per cent respectively.

The distribution to the 36 states comprised revenues from statutory sources, VAT, EMTL and ecological funds. States also received additional N100 billion as augmentation from the non-oil excess revenue account.

According to the report, allocations to states showed that Lagos State recorded the highest revenue at N179.3 billion for the quarter, translating to an average monthly receipt of N59.76 billion. Kano came second with N79.2 billion while Rivers State came third with N78.8 billion.

Besides, Nasarawa state received the lowest allocation of N42.5 billion followed by Ebonyi state with N42.9 billion and Ekiti with N43 billion. The data also showed an average monthly allocation of N14.1 billion to Nasarawa state, indicating that the range between the highest and lowest state allocations was N136.8 billion.

Also, Lagos’ allocation of N179 billion was more than double the amount received by the second and third highest – grossing states -Kano and Rivers respectively, NEITI stated.

From the quarterly review, nine oil producing states, it said, received N424 billion as 13 per cent derivation revenue. This materially altered state rankings in the review, throwing up the derivative states as receiving nearly half of the gross allocations from FAAC.

A closer look at the derivative disbursements showed the four oil bearing states – Akwa Ibom, Bayelsa, Delta and Rivers States in the stand-out region, with Delta state grossing the highest in revenue allocation of N180.68 billion.

NEITI also revealed that the deductions from states’ allocations to service debt and other obligations totalled N225.89 billion, which indicates a 6.5 per cent decline from the previous quarter. The average debt service ratio across states was 9.4 percent with individual state ratios ranging from 1.5 percent to 26.8 per cent.

However, about one-third of the states had a debt service ratio of less than 5 per cent, while more than two-thirds had a ratio of less than 10 per cent. Ogun State, with a ratio of 26.8 per cent topped the chart, closely followed by Lagos (26.5 per cent), and Cross River ranked third, the NEITI report disclosed.

On the outlook for Q4 2025, the NEITI quarterly review noted that early Quarter 4 indicators showed lower average oil prices and slightly higher exchange rates compared with Quarter 3 figures. 1.64 million barrels per day was recorded as average daily crude oil production in Q3 while 1.59 million barrels per day was recorded against the first month of Quarter 4, it said.

According to NEITI, these developments, if sustained, could reduce foreign exchange denominated inflows and lead to lower distributable revenues in Q4 of 2025.

The NEITI report also disclosed that derivation revenue from the solid minerals sector was unavailable for distribution to Federation Account beneficiaries because it was negligible and insufficient for distribution. The last distribution of revenues from solid minerals occurred in August 2024.

The Executive Secretary of NEITI, Sarkin Adar, welcomed the strong remittance performance and the reduction in states’ debt burden, but drew attention to the volatility in oil markets and optimistic budget benchmarks which may pose risks to fiscal sustainability.

To protect gains and strengthen fiscal resilience, NEITI recommended the publication of up-to-date balances and liabilities for key federation accounts including the non-oil Excess Account, Domestic Excess Crude Account, Stabilisation Fund, Ecology Fund, and other mineral resource-linked accounts.

“The publication should provide clear notes explaining FAAC transactions, refunds, net-offs and priority project entries in order to enhance transparency in the inflows, allocations and disbursements from the federation accounts,” it advised.

The review also pointed out the need to apply the Appropriation Act benchmarks consistently when determining monthly distributable revenues, use the Stabilisation Account to smoothen monthly disbursements, and transfer exchange gains into stabilisation buffers.

NEITI urged the government at all levels to ensure the growth of Nigeria’s sovereign wealth and stabilisation capacity, by committing to regular transfers to the Nigeria Sovereign Wealth Fund and other related stabilisation mechanisms in line with the fiscal responsibility frameworks.

It further advised governments at all levels to adopt realistic budget benchmarks by setting a more conservative and achievable crude oil production and price assumptions in the budget to reduce implementation gaps, deficit and debt metrics.

This, it said, is in addition to accelerating revenue diversification by prioritising reforms that would attract investments in to the mining sector, expedite legislation to modernise the Mineral and Mining Act, support reforms in the downstream petroleum sector as well as the full implementation of the Petroleum Industry Act (PIA) to expand domestic refining and value addition.

It called on the Office of the Accountant General of the Federation, the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) FAAC, the National Economic Council (NEC), the National Assembly, and state governments to act on the recommendations to strengthen transparency, accountability, and long-term fiscal sustainability.

“Though the Quarter 3 2025 FAAC results are encouraging, NEITI reiterates that the data presents an opportunity to the government to institutionalise prudent fiscal practices that will protect the gains that have been recorded so far in growing revenue and reduce vulnerability to commodity 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,” Adar said.