The Federation Account Allocation Committee (FAAC) has announced the distribution of ₦1.703 trillion in revenue generated in January 2025 to the Federal Government, states, and local government councils. The allocation was made during the February FAAC meeting held in Abuja, according to a statement by the Director of Press and Public Relations, Office of the Accountant General of the Federation, Bawa Mokwa.
The total distributable revenue of ₦1.703 trillion comprises statutory revenue of ₦749.727 billion, Value Added Tax (VAT) revenue of ₦718.781 billion, Electronic Money Transfer Levy (EMTL) revenue of ₦20.548 billion, and an augmentation of ₦214 billion. The revenue was shared among the three tiers of government, with the Federal Government receiving ₦552.591 billion, states receiving ₦590.614 billion, and local government councils receiving ₦434.567 billion. An additional ₦125.284 billion, representing 13% of mineral revenue, was shared among oil-producing states as derivation revenue.
Breakdown of Revenue Allocation
The communiqué issued by FAAC revealed that the total gross revenue available in January 2025 was ₦2.641 trillion. After deducting ₦107.786 billion for the cost of collection and ₦830.663 billion for transfers, interventions, refunds, and savings, the net distributable revenue stood at ₦1.703 trillion.
- Statutory Revenue: The Federal Government received ₦343.612 billion, states received ₦174.285 billion, and local government councils received ₦134.366 billion. Oil-producing states received ₦97.464 billion as derivation revenue.
- VAT Revenue: The Federal Government received ₦107.817 billion, states received ₦359.391 billion, and local government councils received ₦251.573 billion.
- Electronic Money Transfer Levy (EMTL): The Federal Government received ₦3.082 billion, states received ₦7.192 billion, and local government councils received ₦10.274 billion.
- Augmentation: The Federal Government received ₦98.080 billion, states received ₦49.747 billion, and local government councils received ₦38.353 billion. Oil-producing states received ₦27.820 billion as derivation revenue.
Revenue Performance in January 2025
The communiqué highlighted significant increases in key revenue streams for January 2025 compared to December 2024. Gross statutory revenue rose from ₦1.226 trillion in December 2024 to ₦1.848 trillion in January 2025, an increase of ₦622.125 billion. Similarly, VAT revenue increased from ₦649.561 billion in December 2024 to ₦771.886 billion in January 2025, reflecting a ₦122.325 billion rise.
The increases were attributed to higher collections from Value Added Tax (VAT), Petroleum Profit Tax (PPT), Companies Income Tax (CIT), Excise Duty, Import Duty, and Customs External Tariff (CET) levies. However, Electronic Money Transfer Levy (EMTL) and Oil and Gas Royalty collections decreased significantly during the same period.
Implications for Economic Growth
The ₦1.703 trillion revenue allocation for January 2025 reflects the continued recovery of Nigeria’s economy and the government’s efforts to boost revenue generation. The significant increase in statutory and VAT revenues underscores the effectiveness of recent fiscal policies aimed at expanding the tax base and improving compliance.
The allocation to states and local government councils is expected to support grassroots development and improve service delivery across the country. However, the decrease in EMTL and Oil and Gas Royalty collections highlights the need for diversification of revenue sources to reduce dependence on oil and gas revenues.
The FAAC allocation for January 2025 demonstrates the Federal Government’s commitment to equitable revenue sharing and fiscal transparency. As Nigeria continues to navigate economic challenges, the increased revenue provides an opportunity for governments at all levels to invest in critical infrastructure, healthcare, education, and other sectors that drive sustainable development.
The FAAC communiqué serves as a reminder of the importance of prudent financial management and the need for continued efforts to strengthen revenue generation and accountability in Nigeria’s public sector. With improved revenue performance, the country is better positioned to achieve its economic growth and development goals.
