Nigeria’s three tiers of government shared a cumulative N9.62 trillion from the Federation Account Allocation Committee (FAAC) over a three-month period, covering August, September and October 2025 revenues.
This is according to the data compiled by Nigeria’s statistics office, the National Bureau of Statistics (NBS).
The headline figure indicates a clear downward trend in monthly inflows, suggesting fiscal strain across the period, as in the first three months of 2025.
FAAC disbursements declined steadily from N3.64 trillion in September 2025 (August revenue) to N3.05 trillion in October (September revenue), before falling further to N2.93 trillion in November (October revenue).
The pattern suggests fluctuating VAT performance and Nigeria’s continued exposure to volatile oil and exchange-linked revenues.
The data shows that total cumulative disbursements in the review period stood at N9.62 trillion. Here’s the highlight:
Federal Government (FGN) – Cumulative share: N2.28 trillion
36 States – Cumulative share: N2.13 trillion
774 Local Governments – Cumulative share: N1.56 trillion
The three-month period opened on a relatively strong footing, with FAAC sharing N3.64 trillion from August 2025 revenue.
The Federal Government (FGN) emerged as the biggest beneficiary, receiving N810.05 billion, followed by the 36 states with N709.83 billion, while 774 local governments shared N522.23 billion.
VAT proved a key stabiliser, contributing N100.94 billion to the FGN, N336.45 billion to states, and N235.52 billion to LGs. Statutory allocations also dominated, with N684.46 billion going to the Federal Government alone.
Oil-producing states benefited significantly from derivation-related inflows, including a 13% derivation fund of N183.01 billion, N100.00 billion in refunds on JVC/DECA withdrawals and N150.00 billion in NLNG-related derivation refunds.
However, the month also saw heavy deductions, including over N124 billion paid to revenue collection agencies and a large N851.17 billion transfer to the Non-Oil Excess Account, underscoring structural pressures beneath the headline strength.
By October 2025, FAAC disbursement had fallen to N3.05 trillion, reflecting weaker distributable revenue from September collections. In a notable shift, states overtook the Federal Government, receiving N727.17 billion, compared with N711.31 billion for the FGN. Local governments received N529.95 billion.
The change was driven largely by stronger VAT receipts, which delivered N406.30 billion to states and N284.41 billion to LGs, reinforcing the growing importance of consumption taxes in subnational finances.
The change was driven largely by stronger VAT receipts, which delivered N406.30 billion to states and N284.41 billion to LGs, reinforcing the growing importance of consumption taxes in subnational finances.
Despite this, overall liquidity tightened. Significant sums were again channeled to special accounts and agencies, including a N700.00 billion transfer to the Non-Oil Excess Account and more than N116 billion in combined cost-of-collection payments to FIRS, NCS and NUPRC.
The downward trend continued in November 2025, with FAAC sharing just N2.93 trillion from October revenue — the lowest monthly allocation in the three-month stretch.
This time, the Federal Government rebounded, reclaiming the largest share at N758.41 billion, while states’ allocation fell to N689.12 billion, and LGs received N505.80 billion.
The key driver was a weakening of VAT, which dropped to N100.55 billion for the FGN, N335.15 billion for states and N234.61 billion for LGs. With VAT no longer providing the cushion seen in earlier months, subnational finances came under renewed pressure.
Oil-producing states still received N141.39 billion as 13% derivation, alongside additional oil-linked refunds, but these were insufficient to offset the broader decline in distributable revenue.
Nigeria’s FAAC allocations slid over the August–October 2025 period largely because key revenue streams feeding the Federation Account weakened.
Oil-related receipts, especially petroleum profit tax, oil royalties and upstream taxes, contracted sharply due to lower production volumes, under-performance of oil companies, and broader sector challenges. As in the first three months of 2025, this significantly reduced oil tax contributions, which are central to FAAC disbursements.
At the same time, Value Added Tax (VAT) and other tax revenues also declined, reducing the pool available for sharing. Recent FAAC reports show VAT and statutory receipts declining month-on-month, reflecting shrinking economic activity and the limits of consumption taxes in a weakening economy.
The combination of volatility in oil earnings and a drop in non-oil tax revenues underscores the fiscal pressures facing Nigeria’s budget and subnational liquidity, further highlighting the need for revenue diversification and stronger domestic revenue mobilization.