The Nigerian Extractive Industries Transparency Initiative (NEITI) has revealed that a record ₦6 trillion was shared among the three tiers of government from the Federation Account in the third quarter of 2025. The amount, which includes the 13 per cent derivation paid to oil-producing states, was described by the agency as historic.
According to NEITI’s Quarterly Review of the Federation Account Allocation Committee (FAAC) disbursements, allocations in 2025 rose by 55.6 per cent compared with the same period in 2024, meaning revenues shared have more than doubled within two years. Of the total amount, the Federal Government received ₦2.19 trillion, states got ₦1.97 trillion, while local governments shared ₦1.45 trillion.
The report showed that statutory revenue accounted for 62 per cent of the total funds shared, while Value Added Tax (VAT) contributed 34 per cent. The Electronic Money Transfer Levy (EMTL) and augmentation from non-oil excess revenue made up 2 per cent each.
NEITI explained that states’ allocations came from statutory revenue, VAT, EMTL and the Ecological Fund. In addition, the 36 states received an extra ₦100 billion as augmentation from the non-oil excess revenue account.
Lagos State received the highest allocation at ₦179.3 billion for the quarter, averaging ₦59.76 billion monthly. Kano followed with ₦79.2 billion, while Rivers State received ₦78.8 billion. At the lower end, Nasarawa got ₦42.5 billion, Ebonyi ₦42.9 billion and Ekiti ₦43 billion, creating a ₦136.8 billion gap between the highest and lowest recipients.
The report also disclosed that nine oil-producing states shared ₦424 billion as 13 per cent derivation revenue during the quarter. This significantly reshaped the allocation rankings, with derivation states taking nearly half of total FAAC receipts. Delta State topped the list with ₦180.68 billion, followed by Akwa Ibom, Bayelsa and Rivers states.
On debt deductions, NEITI said ₦225.89 billion was deducted from states’ allocations to service loans and other obligations, representing a 6.5 per cent drop from the previous quarter. The average debt service ratio across states stood at 9.4 per cent, ranging from 1.5 per cent to 26.8 per cent. Ogun State recorded the highest ratio at 26.8 per cent, closely followed by Lagos at 26.5 per cent, with Cross River ranking third.
Looking ahead, NEITI warned that revenues in the fourth quarter of 2025 could come under pressure due to lower oil prices and slightly higher exchange rates. Average crude oil production stood at 1.64 million barrels per day in Q3 but fell to 1.59 million barrels per day in the first month of Q4. If the trend continues, distributable revenue may decline.
The agency also noted that derivation revenue from solid minerals was not shared during the quarter due to negligible earnings, adding that the last distribution from the sector took place in August 2024.
Commenting on the findings, NEITI Executive Secretary, Musa Sarkin Adar, welcomed the strong remittance performance and reduced debt burden on states, but cautioned that global oil market volatility and overly optimistic budget benchmarks could threaten long-term fiscal sustainability.
