Nigeria’s three tiers of government distributed a total of N2.094tn in October 2025, slightly below the N2.103tn shared in September, marking a marginal decline of N9bn or 0.43% month-on-month.
The figures emerged after the Federation Account Allocation Committee (FAAC) convened in Abuja on Wednesday.
In a statement issued by Bawa Mokwa, Director of Press and Public Relations at the Office of the Accountant-General of the Federation, details of the disbursement were outlined across federal, state and local government structures.
According to the statement, “A total of N2.094tn from the October 2025 Federation Account has been allocated to the Federal Government, states, and local government councils.”
The distribution consisted of N1.376tn in statutory revenue, N670.303bn from Value Added Tax (VAT), and N47.870bn from the Electronic Money Transfer Levy (EMTL).
FAAC reported that gross revenue for October stood at N2.934tn, from which N115.278bn was deducted as collection cost, while N724.603bn was allocated to transfers, interventions, refunds, and savings.
Although statutory revenue improved, rising to N2.164tn from N2.128tn in September, VAT collections fell significantly, dropping to N719.827bn, a steep decline of N152.803bn from the N872.630bn recorded the previous month.
From the N2.094tn available for distribution, the Federal Government received N758.405bn, state governments collected N689.120bn, and local government councils got N505.803bn. Oil-producing states shared N141.359bn representing the 13% derivation component.
Out of the N1.376tn statutory revenue, the Federal Government received N650.680bn, states obtained N330.033bn, while local governments took N254.442bn. The 13% derivation fund also came from this statutory component.
From the VAT pool of N670.303bn, the Federal Government collected N100.545bn, states took N335.152bn, and LGs received N234.606bn.
Regarding EMTL revenue, the Federal Government got N7.180bn, states earned N23.935bn, and local governments received N16.755bn.
FAAC noted revenue increases in petroleum profit tax, hydrocarbon tax, companies income tax on upstream operations, capital gains tax, stamp duties, oil and gas royalties, import duty, excise duty, and common external tariff levies. However, VAT, EMTL and certain fees declined during the month.
Despite maintaining monthly allocations above N2tn — buoyed by high oil earnings, improved tax performance and stronger remittances — the lower VAT and EMTL inflow reflected ongoing sensitivity to consumer activity and electronic transaction volume.
A recent BudgIT State of States report highlighted Nigeria’s deepening fiscal reliance on federal allocations, revealing that at least 31 states depend on FAAC for 80% or more of their revenue, intensifying budgetary pressure at the sub-national level.
The report also observed that 29 states derive at least half of their revenue from FAAC, while 21 states rely on it for more than 70% of total receipts.
BudgIT analysts warned that higher FAAC inflows appear to discourage states from aggressively boosting internally generated revenue (IGR), even though some states show progress. Enugu recorded the strongest IGR growth, while Kebbi posted one of the few negative IGR performances.
One example cited was Lagos State, which saw its FAAC allocation jump from N4.24bn to N11.38bn within a year, illustrating how significant federal transfers have become despite Lagos being Nigeria’s most economically productive state.
