FG, States and Local Governments Share N2.09 Trillion October Allocation

The Federation Account Allocation Committee has released a total of N2.09 trillion to the federal government, the 36 states and the 774 local government councils as revenue for October, marking another significant injection into the Nigerian economy amid ongoing fiscal pressures. The disbursement reflects the continued rise in gross federally collected revenue, although officials confirmed that the amount shared in October was slightly lower than the figure recorded in September due to fluctuations in non-oil income and statutory deductions.

According to the breakdown presented at the FAAC meeting in Abuja, the total distributable revenue for the month was built from statutory revenue, Value Added Tax, Electronic Money Transfer Levy and other sources that form part of the monthly accruals. Out of the N2.09 trillion distributed, the federal government received the largest share, followed by the states and local government councils, while oil-producing states also got their 13 percent derivation allocation as required by law.

The federal government received more than N750 billion from the October proceeds, an amount that includes its share of statutory revenue, VAT and EMTL. State governments together received over N680 billion, while the local government councils shared more than N500 billion. Oil-producing states earned a little above N140 billion from the derivation component based on minerals extracted from their respective territories. Officials noted that the statutory revenue component remained the strongest contributor to total inflows for the month, supported by improved receipts from petroleum profit tax, companies’ income tax, royalties, import duties and other revenue lines.

FAAC attributed the slight drop in overall revenue compared to the previous month to reduced inflows from VAT and EMTL. The committee observed that while statutory revenue has shown resilience in recent months, consumption-based taxes often fluctuate due to economic conditions affecting purchasing power and business activities. This volatility, according to the committee, has become more pronounced as households and businesses adjust to rising operational costs and inflationary pressures.

The October allocation once again highlights how dependent many states remain on monthly FAAC disbursements to fund their operations. For a large number of states with narrow internal revenue bases, the statutory transfers are critical for meeting salary obligations, providing basic services and implementing capital projects. Analysts say the heavy reliance on FAAC underscores the urgent need for states to diversify their revenue sources in order to strengthen fiscal independence and reduce vulnerability to national economic shocks.

Local government councils, which collectively received more than half a trillion naira, are expected to utilise their share in strengthening grassroots development. However, stakeholders have repeatedly called for greater transparency in the management of local government funds, noting that poor accountability continues to hinder service delivery at the community level. With increasing complaints about deteriorating primary education structures, healthcare facilities and rural roads, many Nigerians argue that better monitoring of LG allocations is critical.

The derivation revenue paid to oil-producing states continues to be a major talking point in national fiscal discussions. While these states receive additional funds to compensate for the impact of resource extraction, residents in many oil-bearing communities say the financial benefits are not always felt at the grassroots. Environmental degradation, unemployment and poor infrastructure remain concerns in the Niger Delta, despite the billions allocated over the years. Analysts insist that the renewed rise in derivation payments offers another opportunity for oil-producing states to address long-standing developmental challenges.

FAAC officials also highlighted that the gross revenue for October before deductions exceeded N2.9 trillion. However, a significant portion of the funds was removed for statutory deductions such as the cost of revenue collection, transfers to the excess revenue accounts, refunds and other financial obligations. These deductions, the committee explained, are necessary to maintain fiscal balance and support various national obligations, although they reduce the final amount available for sharing among the three tiers of government.

Economic experts have warned that Nigeria must urgently increase its non-oil revenue capacity in order to maintain steady monthly allocations. While the recent upturn in statutory revenue is encouraging, over-dependence on oil-related income remains a risk, especially given global price volatility and production challenges. They stressed that reforms in tax collection, digital payments, trade facilitation and customs operations could significantly boost government earnings and stabilise future FAAC disbursements.

The October allocation also comes at a time when citizens are demanding more accountability from all levels of government. With inflation still elevated and the cost of living rising, Nigerians expect that the funds shared each month will translate into meaningful improvements in infrastructure, social services and local development. Many civil society organisations have reiterated the need for state governments to publish detailed reports on how they use monthly allocations, arguing that transparency will strengthen public trust and ensure prudent utilisation of funds.

 

As the country navigates economic reforms and fiscal adjustments, FAAC’s monthly distributions remain a vital source of funding for national governance. The N2.09 trillion shared for October reflects ongoing efforts to stabilise federal revenue and maintain regular support for states and local governments. Government officials say they will continue to monitor revenue trends, strengthen collection mechanisms and work with relevant agencies to ensure consistent inflows in the coming months.