N6trn Federal Allocation: Nigeria Extractive Industries Transparency Initiative Urges Govt To End Fiscal Waste

The Nigeria Extractive Industries Transparency Initiative (NEITI) has urged federal, state, and local governments to adopt fiscal discipline amid a massive N6 trillion disbursement from the Federation Account Allocation Committee (FAAC) in the third quarter of 2025.

NEITI’s analysis revealed that the federal government received N2.19 trillion, states got N1.97 trillion, and local governments took N1.45 trillion.

The allocation indicated a historic rise in federation account receipts and distributions, explaining that year-on-year quarterly FAAC allocations in 2025 grew by 55.6 per cent compared with Q3 of 2024, while it more than doubled allocations over two years, according to a statement by the director of Communication and Stakeholders Management at NEITI, Obiageli Onuorah.

The report contained in the agency’s Quarterly Review noted that the N6 trillion included 13 per cent payments to derivative states. It also showed that statutory revenues accounted for 62 per cent of shared receipts. In comparison, the Value Added Tax (VAT) rate was 34 per cent, and the Electronic Money Transfer Levy (EMTL) and augmentation from non-oil excess revenue each accounted for 2 per cent, respectively.

The distribution to the 36 states comprised revenues from statutory sources, VAT, EMTL, and ecological funds. States also received an additional N100 billion as augmentation from the non-oil excess revenue account.

The executive secretary of NEITI, Sarkin Adar, called on the Office of the Accountant General of the Federation, the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) FAAC, the National Economic Council (NEC), the National Assembly, and state governments to act on the recommendations to strengthen transparency, accountability, and long-term fiscal sustainability.

“Though the Quarter 3 2025 FAAC results are encouraging, NEITI reiterates that the data present an opportunity to the government to institutionalise prudent fiscal practices that will protect the gains that have been recorded so far in growing revenue and reduce vulnerability to commodity shocks.

“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,” Adar said.

NEITI urged the government at all levels to ensure the growth of Nigeria’s sovereign wealth and stabilisation capacity by committing to regular transfers to the Nigeria Sovereign Wealth Fund and other related stabilisation mechanisms in line with the fiscal responsibility frameworks.

It further advised governments at all levels to adopt realistic budget benchmarks by setting more conservative and achievable crude oil production and price assumptions in the budget, thereby reducing implementation gaps, deficits, and debt metrics.

This, it said, is in addition to accelerating revenue diversification by prioritising reforms that would attract investments into the mining sector, expedite legislation to modernise the Mineral and Mining Act, support reforms in the downstream petroleum sector, as well as the full implementation of the Petroleum Industry Act (PIA) to expand domestic refining and value addition.