FAAC Allocation Reflects a Slight Decline from January Disbursement
The Federation Accounts Allocation Committee (FAAC) has disbursed a total of N1.678 trillion among the Federal Government, State Governments, and Local Government Councils from the February 2025 revenue. The allocation was confirmed during the March 2025 FAAC meeting held in Abuja, presided over by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun.
The latest disbursement marks a decline of N25 billion (1.47%) compared to January 2025, when N1.703 trillion was shared. The shortfall was attributed to lower revenue collections from key sources, including Value Added Tax (VAT), Petroleum Profit Tax (PPT), Companies Income Tax (CIT), and Import Duty.
Breakdown of the N1.678 Trillion Disbursed
According to the FAAC communiqué, the total distributable revenue for February 2025 was derived from various sources:
- Distributable statutory revenue: N827.633 billion
- Value Added Tax (VAT): N609.430 billion
- Electronic Money Transfer Levy (EMTL): N35.171 billion
- Solid Minerals Revenue: N28.218 billion
- Augmentation: N178 billion
To address revenue gaps, N178 billion was provided as augmentation and shared as follows:
- Federal Government: N93.770 billion
- State Governments: N47.562 billion
- Local Government Councils: N36.668 billion
How the N1.678 Trillion Was Shared
Out of the N1.678 trillion total distributable revenue, the breakdown of allocations was as follows:
- Federal Government: N569.656 billion
- State Governments: N562.195 billion
- Local Government Councils: N410.559 billion
- Oil and mineral-producing states (13% derivation): N136.042 billion
Statutory Revenue Distribution (N827.633 Billion)
- Federal Government: N366.262 billion
- State Governments: N185.773 billion
- Local Government Councils: N143.223 billion
- Derivation allocation to oil-producing states: N132.374 billion
VAT Revenue Distribution (N609.430 Billion)
- Federal Government: N91.415 billion
- State Governments: N304.715 billion
- Local Government Councils: N213.301 billion
Electronic Money Transfer Levy (EMTL) Distribution (N35.171 Billion)
- Federal Government: N5.276 billion
- State Governments: N17.585 billion
- Local Government Councils: N12.310 billion
Solid Minerals Revenue Distribution (N28.218 Billion)
- Federal Government: N12.933 billion
- State Governments: N6.560 billion
- Local Government Councils: N5.057 billion
- Derivation allocation to mineral-producing states: N3.668 billion
Rivers Administrator Receives Local Government Allocations
In Rivers State, the ongoing political tension has led to concerns over the management of local government allocations. The state administrator, who is overseeing governance following the recent suspension of elected officials, has now received the local government funds as part of the FAAC disbursement.
Stakeholders in Rivers have expressed concerns about accountability and transparency in handling LGA funds, given the current political climate in the state. The disbursement is expected to support local projects, salary payments, and development initiatives, but civil society groups are calling for proper oversight to ensure funds are used effectively.
Revenue Declines Despite Oil and Gas Gains
FAAC reported increased revenue from Oil and Gas Royalty and the Electronic Money Transfer Levy (EMTL), but this was offset by declines in:
- Value Added Tax (VAT)
- Petroleum Profit Tax (PPT)
- Companies Income Tax (CIT)
- Excise Duty
- Import Duty
The drop in VAT and tax revenue collections has raised concerns over Nigeria’s economic outlook, prompting calls for improved tax enforcement and revenue diversification.
Looking Ahead: Economic Reforms Needed
With declining revenues impacting allocations to states and local governments, experts have urged the federal government to:
- Enhance tax collection mechanisms
- Reduce dependence on oil revenue
- Implement fiscal policies to boost economic stability
Conclusion
The N1.678 trillion FAAC disbursement for February 2025 reflects a slight decline from January, putting additional pressure on states and local councils to manage funds efficiently. In Rivers State, the administrator’s handling of LGA funds will be closely watched amid the ongoing political crisis.
What are your thoughts on Nigeria’s revenue-sharing formula and the management of FAAC allocations? Share your opinions in the comments below!
