Emmanuel OchayiThe Federation Account Allocation Committee (FAAC) has distributed N1.7 trillion in revenue among the federal, state, and local governments for February 2025. This was disclosed in a statement by the Director of Press and Public Relations, Bawa Mokwa.
The FAAC meeting, held in March 2025 in Abuja, was chaired by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun. The Accountant General of the Federation, Shamseldeen Ogunjimi, was also present.
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Breakdown of FAAC Revenue Distribution
The total distributable FAAC revenue for February 2025 was N1.678 trillion. This comprised:
Statutory revenue: N827.633 billion
Value Added Tax (VAT) revenue: N609.430 billion
Electronic Money Transfer Levy (EMTL): N35.171 billion
Solid Minerals revenue: N28.218 billion
Augmentation fund: N178 billion
According to the FAAC communiqué, the total gross revenue available for February 2025 was N2.344 trillion. However, deductions for collection costs amounted to N89.092 billion, while transfers, interventions, refunds, and savings totalled N577.097 billion.
Federal, State, and Local Government Allocations
From the N1.678 trillion distributed, the federal government received N569.656 billion, while state governments got N562.195 billion. Local government councils were allocated N410.559 billion, and N136.042 billion was distributed as derivation revenue to oil-producing states.
Further breakdowns showed that from the N827.633 billion statutory revenue:
The federal government received N366.262 billion
State governments received N185.773 billion
Local governments received N143.223 billion
N132.374 billion was shared as derivation revenue
From the N609.430 billion VAT revenue:
The federal government received N91.415 billion
State governments got N304.715 billion
Local governments received N213.301 billion
Decline in FAAC Revenue Compared to January 2025
Gross statutory revenue for February 2025 stood at N1.653 trillion. This was lower than the N1.848 trillion recorded in January 2025 by N194.664 billion. Similarly, VAT revenue declined from N771.886 billion in January 2025 to N654.456 billion in February 2025, reflecting a drop of N117.430 billion.
Despite this decline, FAAC revenue from Oil and Gas Royalty and Electronic Money Transfer Levy (EMTL) increased. However, revenue from VAT, Petroleum Profit Tax (PPT), Companies Income Tax (CIT), Excise Duty, Import Duty, and Common External Tariff (CET) levies recorded decreases.
Economic Implications of FAAC Revenue Distribution
The FAAC revenue distribution is a critical source of funding for federal, state, and local governments. It supports government spending on infrastructure, salaries, and development projects. However, the decline in key revenue sources such as VAT and CIT raises concerns about the country’s economic performance.
With declining revenue from major tax sources, experts have suggested that the government should strengthen revenue collection mechanisms and diversify its income streams. The need for improved tax compliance, reduced dependency on oil revenue, and economic reforms remains a key discussion among policymakers.
The February 2025 FAAC revenue distribution highlights the importance of shared national resources in supporting government activities across all levels. However, the drop in revenue compared to the previous month signals a need for stronger economic policies. As FAAC revenue fluctuates, stakeholders continue to push for more sustainable financial strategies to ensure long-term economic stability.
