Nigeria FAAC disbursement hits a record N6 trillion in Q3 2025, boosting state allocations and easing debt pressures, says NEITI

Nigeria recorded a historic N6.0 trillion in Federation Account Allocation Committee (FAAC) disbursements in the third quarter of 2025, according to the Nigerian Extractive Industries Transparency Initiative (NEITI).

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The quarterly review shows a 55.6 per cent year-on-year increase compared with Q3 2024, marking more than double the total allocations over the past two years.

The Federal Government received N2.19 trillion, state governments N1.97 trillion, and local governments N1.45 trillion.

Statutory revenues accounted for 62 per cent of the distribution, while Value Added Tax contributed 34 per cent.

Lagos State emerged as the highest-earning state, receiving N179.3 billion, followed by Kano State with N79.2 billion and Rivers State with N78.8 billion.

Nasarawa State received N42.5 billion, Ebonyi N42.9 billion, and Ekiti N43 billion, highlighting a wide gap between the highest- and lowest-earning states.

Nine oil-producing states received N424 billion as 13 per cent derivation revenue.

Delta State led this category with N180.68 billion, underscoring the continuing influence of hydrocarbon production on subnational allocations.

NEITI noted that deductions for debt servicing and other obligations totalled N225.89 billion, representing a 6.5 per cent decline from the previous quarter.

The average debt service ratio across states stood at 9.4 per cent, with Ogun State recording the highest ratio at 26.8 per cent, followed by Lagos at 26.5 per cent.

Looking ahead, NEITI cautioned that early indicators for Q4 2025 suggest potential pressure on revenues due to lower average crude oil prices and slightly higher exchange rates.

Average daily oil production declined from 1.64 million barrels per day in Q3 to 1.59 million barrels in the first month of Q4.

NEITI Executive Secretary Musa Sarkin Adar welcomed the strong FAAC performance but warned against fiscal complacency.

He recommended improved transparency in federation accounts, stricter adherence to budget benchmarks, and accelerated revenue diversification through reforms in mining, downstream petroleum, and full implementation of the Petroleum Industry Act.

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“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,” Sarkin Adar said.