FAAC Allocations Slide to N9.62trn in Three Months as Oil, Tax Revenues Dwindles

 

Nigeria’s three tiers of government shared a cumulative N9.62 trillion from the Federation Account Allocation Committee (FAAC) over the August–October 2025 revenue period, according to data from the National Bureau of Statistics.

Monthly disbursements fell steadily from N3.64 trillion in September (August revenue) to N3.05 trillion in October (September revenue), before sliding further to N2.93 trillion in November (October revenue), underscoring mounting fiscal pressures.

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The Federal Government received a total of N2.28 trillion, while the 36 states collectively got N2.13 trillion and local governments N1.56 trillion. August opened strongly at N3.64 trillion, supported by statutory allocations and VAT inflows, but heavy deductions and transfers to special accounts revealed underlying strain.

September disbursements dropped to N3.05 trillion, with states overtaking the Federal Government in allocations due to stronger VAT receipts, though liquidity tightened as large sums were again diverted to special accounts. By October, FAAC fell further to N2.93 trillion, with VAT weakening sharply and subnational finances coming under renewed pressure despite derivation inflows to oil-producing states.

The slide in allocations was driven by contracting oil-related receipts, including petroleum profit tax, royalties, and upstream taxes, alongside declining VAT and other non-oil revenues.

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Recent FAAC reports show statutory and VAT receipts falling month-on-month, reflecting shrinking economic activity and the limits of consumption taxes in a weakening economy.

The combination of volatile oil earnings and reduced non-oil tax revenues highlights the fiscal challenges facing Nigeria’s budget and subnational liquidity, reinforcing the urgent need for revenue diversification and stronger domestic revenue mobilisation.