The Federation Account Allocation Committee (FAAC) has announced a third straight monthly decline in revenue disbursements, with N1.578 trillion shared among the federal, state, and local governments for March 2025. This follows previous allocations of N1.678 trillion in February and N1.703 trillion in January, reflecting a persistent downturn in distributable revenue.
The breakdown of the March allocation shows N931.325 billion from statutory revenue, N593.750 billion from Value Added Tax (VAT), N24.971 billion from the Electronic Money Transfer Levy (EMTL), and N28.711 billion from exchange difference revenue. The figures were disclosed in a statement by Bawa Mokwa, Director of Press and Public Relations at the Office of the Accountant General of the Federation, following the April FAAC meeting in Abuja.
### **Revenue Distribution**
From the total distributable sum, the Federal Government received N528.696 billion, state governments were allocated N530.448 billion, and local government councils got N387.002 billion. Additionally, oil-producing states received N132.611 billion as 13% derivation revenue.
A detailed analysis reveals that statutory revenue allocations included N422.485 billion for the Federal Government, N214.290 billion for states, and N165.209 billion for local governments. VAT revenue distribution saw the Federal Government taking N89.063 billion, states receiving N296.875 billion, and local governments getting N207.813 billion.
### **Revenue Performance**
Despite a rise in gross statutory revenue from N1.653 trillion in February to N1.718 trillion in March, VAT collections dropped from N654.456 billion to N637.618 billion. The FAAC report highlighted significant increases in Petroleum Profit Tax and Companies Income Tax but noted declines in oil and gas royalties, VAT, EMTL, excise duties, and import levies.
The committee also reported that N85.376 billion was deducted as cost of collection, while N747.180 billion was allocated for transfers, refunds, and other interventions.
### **Implications**
The continued decline in FAAC allocations raises concerns about fiscal sustainability for states and local governments, many of which rely heavily on these disbursements to fund critical services. Economists warn that unless revenue-generating measures are strengthened, the trend could strain public finances further.
The FAAC has called for enhanced efforts to boost non-oil revenue streams and improve tax compliance to stabilize future allocations. As Nigeria navigates economic challenges, stakeholders are closely monitoring revenue trends and policy responses to mitigate the impact on governance and development.
