In a recent meeting held in Abuja, the Federation Account Allocation Committee (FAAC) approved the distribution of N2.22 trillion among Nigeria’s three tiers of government for August 2025. The allocation, derived from a total revenue pool of N3.63 trillion, was announced by the Ministry of Finance on Wednesday, with the meeting presided over by Wale Edun, the Minister of Finance and Coordinating Minister of the Economy.
Breakdown of the Allocation
The N2.22 trillion was sourced from various revenue streams, including statutory revenue, value-added tax (VAT), electronic money transfer levy (EMTL), and exchange differences. The federal government received N810.05 billion, state governments were allocated N709.83 billion, and local government areas (LGAs) shared N522.23 billion. Additionally, oil-producing states received N183.01 billion as part of the 13% derivation fund.
The FAAC communiqué detailed that N124.84 billion was designated for collection costs, while N1.28 trillion was allocated for transfers, interventions, and refunds.
VAT Revenue Distribution
The gross revenue from VAT for August 2025 amounted to N722.61 billion, an increase of N34.67 billion compared to July’s N687.94 billion. From this amount:
- N28.91 billion was allocated for collection costs.
- N20.81 billion was set aside for transfers, interventions, and refunds.
- The federal government received N100.93 billion.
- States were allocated N336.45 billion.
- Local governments received N235.51 billion.
Statutory Revenue and Other Allocations
The gross statutory revenue for August was N2.83 trillion, a decrease of N231.91 billion from the N3.07 trillion recorded in July. From this amount:
- N94.58 billion covered collection costs.
- N1.26 trillion was allocated for transfers, interventions, and refunds.
- The federal government received N684.46 billion.
- States were allocated N347.16 billion.
- Local governments received N267.65 billion.
- Oil-producing states received N179.31 billion as 13% derivation revenue.
From the EMTL revenue of N33.68 billion:
- The federal government received N4.85 billion.
- States got N16.16 billion.
- Local governments received N11.31 billion.
- N1.34 billion was allocated for collection costs.
Additionally, N41.28 billion from exchange differences was distributed as follows:
- Federal government: N19.79 billion.
- States: N10.04 billion.
- Local governments: N7.74 billion.
- Oil-producing states: N3.70 billion.
Revenue Trends
The FAAC noted significant increases in oil and gas royalties, VAT, and CET levies for August. However, decreases were observed in petroleum profit tax (PPT), import duty, EMTL, companies’ income tax (CIT), and excise duty.
Context and Economic Outlook
This disbursement follows a N2.001 trillion allocation in July 2025, as reported by Nairametrics. The consistent revenue distributions reflect Nigeria’s ongoing efforts to manage its fiscal resources amidst economic reforms. Finance Minister Wale Edun recently highlighted the country’s 3.13% GDP growth in Q1 2025, citing it as evidence of economic resilience and the impact of ongoing policy measures.
The FAAC’s August 2025 allocation underscores the government’s commitment to equitable revenue sharing across federal, state, and local governments, supporting public services and development initiatives nationwide.
