Abuja — The Federal Government, 36 states and 774 local government councils shared a total of N26 trillion from the Federation Account Allocation Committee (FAAC) revenue in 2025, representing an 84.2 per cent year-on-year (YoY) increase compared to the N14.11 trillion shared in 2024.
An analysis of FAAC communiqués for the period shows that the Federal Government received N14 trillion in 2025, marking a sharp 178.8 per cent YoY increase from N5.02 trillion in the previous year.
Revenue allocations to state governments also rose significantly, increasing by 43.5 per cent YoY to N7.52 trillion in 2025, up from N5.24 trillion in 2024.
Similarly, local government councils recorded a 29.3 per cent YoY growth, with total allocations rising to N4.98 trillion from N3.85 trillion in 2024.
Allocations from Value Added Tax (VAT) improved further, climbing by 22.8 per cent YoY to N8.23 trillion in 2025, compared to N6.7 trillion in 2024.
Meanwhile, Nigeria’s oil-producing states received N1.6 trillion as 13 per cent derivation funds from FAAC revenue in 2025, representing a 14 per cent YoY increase over the N1.4 trillion received in 2024.
Under Nigeria’s revenue-sharing formula, the nine oil-producing states—Abia, Akwa Ibom, Anambra, Bayelsa, Delta, Edo, Imo, Ondo and Rivers—are entitled to 13 per cent of oil revenue derived from their territories.
Commenting on the development, analysts at Cowry Asset Management Plc said government revenues are expected to strengthen further in the coming months, driven by the mandatory fiscalisation of tax processes, expanded digital revenue administration, and ongoing efforts to broaden the tax base.
According to the firm, these reforms are expected to improve compliance, reduce leakages and enhance transparency. However, it warned that fiscal risks remain elevated, citing Nigeria’s budget deficit estimated at about N25.3 trillion, which continues to exert pressure on borrowing requirements and debt sustainability.
The analysts also noted that while geopolitical tensions and possible supply disruptions in global energy markets could push crude oil prices higher and temporarily boost FAAC inflows, the volatility underscores the urgency of accelerating non-oil revenue reforms and maintaining prudent fiscal management.
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