The Federation Accounts Allocation Committee (FAAC) disbursed a record N15.26 trillion to the Federal, State, and Local Governments in 2024, marking a significant 43% increase in government revenue compared to previous years.
Obiageli Onuorah, Acting Director of Communication & Stakeholders Management at the Nigerian Extractive Industry Transparency Initiative (NEITI), shared the figures in the latest FAAC Quarterly Review on Tuesday in Abuja. The disbursements represent a historic high, driven by ongoing fiscal reforms, including the removal of fuel subsidies and foreign exchange rate adjustments, which have positively impacted oil revenue remittances.
Dr. Orji Ogbonnaya Orji, NEITI’s Executive Secretary, explained that the report reflects key fiscal changes, particularly the subsidy removal in mid-2023 and the effects of debt repayment deductions on state allocations. The review evaluates the sustainability of government borrowing and the dependence on natural resources, focusing on states benefiting from the 13% derivation revenue from oil, gas, and solid minerals.
The breakdown of disbursements showed that the Federal Government received N4.95 trillion, States received N5.81 trillion, and Local Governments received N3.77 trillion, with the total including derivation revenue. Notably, state governments saw the largest increase in allocations, with a 62% rise from N3.58 trillion in 2023. Local governments received a 47% increase, while the Federal Government’s share rose by 24%.
The total FAAC disbursements grew by 66.2% from N9.18 trillion in 2022 to N10.9 trillion in 2023, reaching N15.26 trillion in 2024. The significant surge from 2023 to 2024 was attributed to the government’s fiscal reforms, including the boost in naira-denominated mineral revenue by over 400%.
Despite the positive revenue growth, NEITI warned of potential economic risks tied to the reforms, such as inflationary pressures, rising debt servicing costs, and fiscal uncertainties, particularly for states reliant on oil revenues. The agency urged governments at all levels to adopt innovative strategies to mitigate these risks.
The report also highlighted state-by-state allocations, with Lagos receiving the highest allocation of N531.1 billion, followed by Delta (N450.4 billion) and Rivers (N349.9 billion). In contrast, Nasarawa received the lowest allocation at N108.3 billion. A significant disparity in financial allocations was revealed, with the top four states—Lagos, Delta, Rivers, and Akwa Ibom—receiving N1.49 trillion, more than three times the combined total of the bottom four states.
Additionally, debt deductions from states totaled N800 billion, accounting for 12.3% of the total allocations. Lagos had the highest debt deduction at N164.7 billion, followed by Kaduna at N51.2 billion. The report raised concerns about the debt-to-revenue ratios of states, particularly those in the lower half of the FAAC allocation rankings but with high debt burdens.
