Amid rising inflation and economic hardship, the Federal Government, states and local governments shared a record N15.26 trillion from the Federation Accounts Allocation Committee (FAAC) in 2024.  
 
According to the latest Nigerian Extractive Industry Transparency Initiative (NEITI) FAAC Quarterly Review, this represents a 43 per cent increase from the previous year’s disbursement.  
 
However, the impact of the allocation has been significantly eroded by naira devaluation and worsening inflationary pressures. The report, released in Abuja by NEITI, attributes the surge in revenue to fiscal reforms, particularly the removal of fuel subsidy and foreign exchange adjustments, which significantly increased naira-denominated oil revenues. 
 
The review reveals that the Federal Government received N4.95 trillion, while state governments received N5.81 trillion, and local councils received N3.77 trillion, bringing total disbursements, including 13 per cent derivation revenue, to N15.26 trillion.
 
State allocations recorded the highest percentage increase, rising 62 per cent from N3.58 trillion in 2023. Local councils saw a 47 per cent increase, while the Federal Government’s share grew by 24 per cent, up from N3.99 trillion in 2023 to N4.95 trillion in 2024.  
 
The report also highlights a significant divide in revenue distribution among states, with Lagos receiving the highest allocation of N531.1 billion, followed by Delta with N450.4 billion and Rivers with N349.9 billion.  

At the lower end of the scale, Nasarawa received N108.3 billion, Ebonyi N110 billion, and Ekiti N111.9 billion.  Despite the increase in revenue disbursements, NEITI warns of major economic risks, including inflationary pressures, rising debt servicing costs, and fiscal uncertainty for states heavily dependent on oil revenues. 
 
The removal of fuel subsidy, while increasing the government’s earnings, compounded the cost-of-living crisis for Nigerians, making it imperative for authorities to adopt measures to mitigate economic risks.
 
The review also highlights growing concerns over debt deductions, revealing that N800 billion was deducted from state allocations for debt servicing and other obligations, accounting for 12.3 per cent of total state revenues. Lagos recorded the highest deduction, losing N164.7 billion, followed by Kaduna with N51.2 billion, Rivers with N38.6 billion and Bauchi with N37.2 billion. Many states with high debt deductions ranked lower in FAAC allocations, raising concerns over debt sustainability and fiscal management.
 
NEITI urged the government to control inflation and stabilise the exchange rate while also diversifying revenue sources beyond oil.   The agency stressed the need to enhance internal revenue generation at all levels of government, strengthen fiscal transparency, and ensure greater accountability in resource management. It also recommended increasing savings in the Excess Crude Account (ECA) as a buffer against revenue volatility.
 
The Executive Secretary of NEITI, Dr Orji Ogbonnaya Orji, stated that while fiscal reforms boosted revenue collection, the government must adopt proactive measures to manage economic challenges and ensure long-term financial stability.   The report, he noted, serves as a critical tool for stakeholders to hold government officials accountable for the effective use of public funds, particularly revenues derived from Nigeria’s extractive industries.