Nigeria’s three tiers of government shared N2.094 trillion from the Federation Account in October 2025, recording a slight 0.43 per cent drop from the N2.103 trillion distributed in September, largely due to a steep decline in Value Added Tax receipts.
The Federation Account Allocation Committee (FAAC), which met in Abuja on Wednesday, approved the disbursement after reviewing inflows for the month. A statement from the Office of the Accountant-General of the Federation confirmed that the October payout consisted of N1.376 trillion in statutory revenue, N670.3 billion from VAT, and N47.87 billion from the Electronic Money Transfer Levy (EMTL).
While gross statutory revenue climbed by N36.8 billion to N2.164 trillion, VAT collections plunged by N152.8 billion to N719.8 billion, reflecting weaker consumer spending and lower taxable transactions in the review period.
Breakdown of the N2.094 trillion shared:
– Federal Government: N758.41 billion
– 36 States: N689.12 billion
– 774 Local Government Councils: N505.80 billion
– Derivation (13% of mineral revenue to oil-producing states): N141.36 billion
The modest month-on-month decline marks the first dip after several consecutive months of allocations exceeding N2 trillion, a trend supported by higher crude oil prices, improved tax administration, and stronger remittances from agencies such as the Nigeria Customs Service and Federal Inland Revenue Service.
Despite the robust headline figures, fiscal analysts continue to highlight Nigeria’s heavy dependence on oil-related transfers. According to the latest BudgIT State of States report, 31 states still rely on FAAC transfers for at least 80 per cent of their revenue, leaving most sub-national governments vulnerable to oil-price volatility and fluctuations in non-oil collections such as VAT.
“Every time FAAC numbers rise, the incentive for many states to aggressively grow their own tax base appears to weaken,” a senior BudgIT analyst noted. The report showed that only 15 states managed to increase internally generated revenue by more than 50 per cent over the reviewed period, while two states recorded negative IGR growth.
As Nigeria heads into the 2026 budget season, the October allocation serves as a reminder that, despite record-high monthly payouts, structural fiscal challenges remain for the majority of states that continue to treat federal transfers as their primary lifeline.
