The Nigeria Extractive Industries Transparency Initiative (NEITI) has revealed that the Federation Accounts Allocation Committee (FAAC) disbursed an unprecedented N15.26 trillion to the federal, state, and local governments in 2024.
This marks a historic high in revenue distribution and a 43% increase compared to previous years, according to the NEITI FAAC Quarterly Review released on Tuesday in Abuja.
The report attributed the surge in revenue disbursements to the Federal Government’s sustained fiscal reform policies, particularly the removal of fuel subsidies and the adjustment of foreign exchange rates.
These policies have significantly boosted oil revenue remittances, which have been a major driver of the increased allocations.
Dr. Orji Ogbonnaya Orji, the Executive Secretary of NEITI, highlighted that the analysis was conducted against the backdrop of major fiscal reforms that have reshaped Nigeria’s revenue landscape.
He emphasized the importance of assessing the sustainability of borrowing by federal and state governments to fund their projects and programs, as well as the implications of natural resource dependence, especially for states benefiting from the 13% derivation revenue from oil, gas, and solid minerals.
Breakdown of Allocations
- Federal Government: Received N4.95 trillion, a 24% increase from N3.99 trillion in 2023.
- State Governments: Received N5.81 trillion, marking a 62% increase from N3.58 trillion in 2023.
- Local Governments: Received N3.77 trillion, a 47% increase from the previous year.
The total FAAC disbursements, including derivation revenue, amounted to N15.26 trillion, reflecting a 66.2% increase from N9.18 trillion in 2022 and N10.9 trillion in 2023.
The most significant growth occurred between 2023 and 2024.
State-by-State Allocation Analysis
- Top Recipients: Lagos State received the highest allocation of N531.1 billion, followed by Delta (N450.4 billion) and Rivers (N349.9 billion).
- Lowest Recipients: Nasarawa State received the least allocation of N108.3 billion, followed by Ebonyi (N110 billion) and Ekiti (N111.9 billion).
Six states—Lagos, Rivers, Bayelsa, Akwa Ibom, Delta, and Kano—each received over N200 billion, collectively accounting for 33% of total allocations to all states. In contrast, the six lowest-receiving states—Yobe, Gombe, Kwara, Ekiti, Ebonyi, and Nasarawa—accounted for only 11.5% of total allocations.
Debt Deductions and Fiscal Risks
The report also highlighted significant debt deductions for states’ foreign debts and other contractual obligations, totaling N800 billion, which represents 12.3% of total allocations to the 36 states, including derivation revenue. Lagos State recorded the highest debt deduction of N164.7 billion, accounting for over 20% of total deductions, followed by Kaduna (N51.2 billion), Rivers (N38.6 billion), and Bauchi (N37.2 billion).
Dr. Orji urged governments at all levels to take innovative actions to mitigate the economic and social risks associated with these reforms, such as inflationary pressures, rising debt servicing costs, and fiscal uncertainties for oil-dependent states. He emphasized the need for sustainable revenue growth, job creation, poverty reduction, and inflation control.
The NEITI FAAC Review reiterated the importance of leveraging the findings and data provided to hold all levels of government accountable for the effective management of public resources, particularly revenues from the extractive industries.
Dr. Orji called for sustained policy reform measures to ensure economic stability and long-term growth.
