By Douglas Maha, Abuja
The Federation Account Allocation Committee (FAAC) has distributed N1.703 trillion in January 2025 revenue to the federal, state, and local governments. This decision was made during the February 2025 FAAC meeting held in Abuja, following a prior deadlock over alleged discrepancies in the funds remitted by the Nigerian National Petroleum Company Limited (NNPCL).
The breakdown of the N1.703 trillion in total distributable revenue comprises different sources, including statutory revenue, Value Added Tax (VAT) revenue, electronic money transfer levy revenue, and an augmentation allocation. This distribution process ensures that all levels of government are funded adequately for national development.
Key Figures and Breakdown of Revenue Distribution
| Revenue Source | Amount (N) | Federal Government (N) | State Governments (N) | Local Governments (N) | Derivation Revenue (13% of Mineral Revenue) (N) |
|---|---|---|---|---|---|
| Total Distributable Revenue | 1.703 trillion | 552.591 billion | 590.614 billion | 434.567 billion | 125.284 billion |
| Distributable Statutory Revenue | 749.727 billion | 343.612 billion | 174.285 billion | 134.366 billion | 97.464 billion |
| Distributable VAT Revenue | 718.781 billion | 107.817 billion | 359.391 billion | 251.573 billion | N/A |
| Electronic Money Transfer Levy | 20.548 billion | 3.082 billion | 7.192 billion | 10.274 billion | N/A |
| Augmentation | 214 billion | 98.080 billion | 49.747 billion | 38.353 billion | 27.820 billion |
Total Revenue and Deductions
A total gross revenue of N2.641 trillion was available in January 2025. After deductions for the cost of collection (N107.786 billion) and transfers, interventions, refunds, and savings (N830.663 billion), the final distributable amount came to N1.703 trillion.
Significant Increases in Revenue Sources
- Gross Statutory Revenue: The gross statutory revenue for January 2025 amounted to N1.848 trillion. This was a significant increase of N622.125 billion from December 2024, where N1.226 trillion was recorded. The increase was driven primarily by higher oil prices and improved collection efficiency.
- VAT Revenue: The Value Added Tax (VAT) revenue also saw a significant rise, with N771.886 billion available in January 2025, compared to N649.561 billion in December 2024—an increase of N122.325 billion. This indicates a positive growth trend in domestic consumption and the expansion of VAT collections.
Revenue Distribution to Governments
- Federal Government: The federal government received N552.591 billion in total from the distributable revenue. This amount was allocated from various revenue sources, including statutory revenue (N343.612 billion), VAT revenue (N107.817 billion), electronic money transfer levies (N3.082 billion), and the augmentation fund (N98.080 billion).
- State Governments: The 36 state governments received a combined total of N590.614 billion. Of this, N174.285 billion was from statutory revenue, N359.391 billion came from VAT revenue, N7.192 billion from electronic money transfer levies, and N49.747 billion from the augmentation fund.
- Local Governments: Local governments received N434.567 billion. This amount came from various sources: N134.366 billion from statutory revenue, N251.573 billion from VAT revenue, N10.274 billion from electronic money transfer levies, and N38.353 billion from the augmentation fund.
Derivation Revenue
A critical aspect of the allocation process is the sharing of derivation revenue, which is based on the revenue generated from oil and mineral resources. A total of N125.284 billion was allocated to the benefiting states as derivation revenue, which corresponds to 13% of mineral revenue.
- The electronic money transfer levy is a recent revenue source introduced by the government to generate additional funds for the Federation Account. This levy is applied to all electronic money transfers and is part of the broader push to formalize and increase digital financial transactions within the country.
- The augmentation is a special revenue pool created to address shortfalls or funding gaps within the system, ensuring that governments at all levels have sufficient funds for operations and development projects. This augmentation helps balance out discrepancies that may arise due to changes in economic conditions or lower-than-expected revenues.
The FAAC meeting for January 2025 marked a significant step in ensuring that government funds are distributed fairly among all levels of government. The increase in revenue, especially from statutory and VAT sources, highlights positive economic activity and better revenue collection mechanisms. While the total distributable revenue of N1.703 trillion is a considerable sum, it is expected to be effectively managed and utilized for the development of infrastructure, social services, and economic growth.
