Government Tiers Split N2.09tn October Earnings

The Federal Government, states, and local government councils collectively received N2.094tn as revenue for October 2025, a slight reduction from the N2.103tn distributed in September. The difference amounts to N9bn, representing a marginal 0.43 per cent month-on-month decline.

The Federation Account Allocation Committee (FAAC) disclosed the figures after its meeting in Abuja on Wednesday. Details of the distribution were contained in a statement signed by the Director of Press and Public Relations at the Office of the Accountant-General of the Federation, Bawa Mokwa. According to the statement, the N2.094tn shared for October comprised statutory revenue, Value Added Tax (VAT), and receipts from the Electronic Money Transfer Levy (EMTL).

The communiqué explained that the total distributable revenue included N1.376tn from statutory earnings, N670.303bn from VAT, and N47.870bn from EMTL. It also noted that gross revenue for the month stood at N2.934tn, from which N115.278bn was deducted as the cost of collection. Another N724.603bn was set aside for transfers, interventions, refunds, and savings.

Statutory revenue recorded a slight improvement. Gross statutory inflow rose to N2.164tn, surpassing the N2.128tn generated in September by N36.832bn. VAT revenue, however, experienced a significant drop. Gross VAT collection fell to N719.827bn, down by N152.803bn compared with the N872.630bn recorded in the previous month.

Out of the N2.094tn shared, the Federal Government received N758.405bn, states got N689.120bn, and local government areas received N505.803bn. Oil-producing states received N141.359bn as 13 per cent derivation from mineral revenue.

Sharing the N1.376tn statutory component, the Federal Government obtained N650.680bn, states received N330.033bn, and local governments got N254.442bn. The N141.359bn derivation fund was also drawn from this statutory pool.

From the N670.303bn VAT revenue, the Federal Government received N100.545bn, while states and local governments received N335.152bn and N234.606bn respectively. In the distribution of the N47.870bn EMTL collection, the Federal Government received N7.180bn, states got N23.935bn, and councils received N16.755bn.

FAAC noted improvements in several revenue categories, including petroleum profit tax, hydrocarbon tax, companies’ income tax on upstream operations, capital gains tax, stamp duties, oil and gas royalties, import duty, excise duty, and common external tariff charges. However, VAT, EMTL, and fees recorded declines.

October’s distribution reinforces the recent trend of high monthly FAAC allocations exceeding N2tn, driven largely by stronger oil earnings, enhanced tax collections, and improved remittances from major revenue-generating agencies. Nonetheless, the slight decrease from September indicates continued volatility in VAT and EMTL inflows, which are highly sensitive to consumption levels and transaction volumes.

The 10th edition of the BudgIT State of States Report highlighted the growing fiscal strain on subnational governments. It revealed that over 30 states rely heavily on FAAC transfers for their revenue, with 31 states depending on federal allocations for at least 80 per cent of their income. The report cited examples such as Lagos, whose FAAC allocation rose from N4.24bn to N11.38bn within a year, illustrating how significant federal transfers have become.

Despite this dependence, the report commended states that recorded strong year-on-year growth in internally generated revenue (IGR). Fifteen states increased their IGR by more than 50 per cent, with Enugu achieving the highest growth, while only two states posted negative IGR performance, including Kebbi.

Overall, the report warned that as states continue to rely heavily on FAAC allocations, their motivation to expand internal revenue sources weakens, posing long-term risks to fiscal sustainability.