Nigeria Economic Update, Issue 2

According to the National Bureau of Statistics (NBS), the Federation Account Allocation Committee (FAAC) disbursed a total of ₦2.93 trillion to the three tiers of government in November 2025 from the total revenue generated in October 2025. This comprised ₦2.16 trillion from the Statutory Account, ₦49.87 billion from Electronic Money Transfer Levy (EMTL), and ₦719.83 billion from Value Added Tax (VAT). Of the total allocation, the federal government received ₦758.41 billion, state governments ₦689.12 billion, and local governments ₦505.80 billion, while ₦141.39 billion was distributed to oil-producing states from the 13% derivation fund. These allocations reveal that effective revenue mobilisation and timely disbursement are essential for sustaining public service delivery. However, boosting internal revenue mobilisation is very crucial at the subnational level to reduce dependence on FAAC, as most states are largely dependent on FAAC. Thus, there is a need to create an enabling environment for businesses in states to attract investment, which will translate to more tax revenue mobilised at the state and local government levels. To consolidate the current gains in revenue mobilisation, policymakers should strengthen revenue collection efficiency through the digitalisation of tax processes, enhance transparency, and expand non-oil revenue sources. Ensuring there is improved fiscal planning will help stabilise both national and subnational finances, which will support development initiatives across the federation.

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