The January 2025 Federation Account Revenue has been shared, with the Federal Government, states, and local government councils receiving a total of ₦1.703 trillion. This was announced on Thursday by Bawa Mokwa, Director of Press and Public Relations, Office of the Accountant General of the Federation, after the February Federation Account Allocation Committee (FAAC) meeting in Abuja.
A FAAC communiqué revealed that the total amount distributed came from multiple revenue streams:
- ₦749.727 billion from statutory revenue
- ₦718.781 billion from Value Added Tax (VAT)
- ₦20.548 billion from the Electronic Money Transfer Levy
- ₦214 billion as augmentation
The communiqué also stated that the gross revenue available in January 2025 was ₦2.641 trillion, but deductions for cost of collection (₦107.786 billion) and transfers, interventions, and refunds (₦830.663 billion) reduced the final amount for distribution.
FAAC Meeting Highlights Increase in Gross Revenue for January 2025
The FAAC communiqué confirmed that gross statutory revenue for January 2025 stood at ₦1.848 trillion, marking a ₦622.125 billion increase from December 2024’s ₦1.226 trillion. Similarly, Value Added Tax (VAT) revenue increased from ₦649.561 billion in December 2024 to ₦771.886 billion in January 2025, reflecting a ₦122.325 billion rise.
Despite the increase in revenue, concerns persist over deductions and allocations, with many questioning whether the current distribution method benefits all tiers of government fairly. Critics argue that the Federal Government continues to take a larger share, leaving state and local governments struggling with insufficient funds to meet their obligations.
Breakdown of ₦1.703 Trillion Revenue Allocation
From the total ₦1.703 trillion distributable revenue:
- The Federal Government received ₦552.591 billion
- State governments received ₦590.614 billion
- Local Government Councils (LGCs) got ₦434.567 billion
- ₦125.284 billion (13% of mineral revenue) was allocated to oil-producing states as derivation revenue
For the ₦749.727 billion statutory revenue:
- The Federal Government took ₦343.612 billion
- State governments received ₦174.285 billion
Is FAAC Revenue Sharing Formula Fair?
The FAAC revenue-sharing formula has long been a subject of debate. While the Federal Government defends its larger share, state and local governments argue that they bear the real burden of governance, especially in areas like education, healthcare, and infrastructure.
Many economic analysts have criticized the system, pointing out that Nigeria’s over-reliance on oil revenue continues to limit fiscal sustainability. There are calls for tax reforms and diversification to ensure that non-oil revenues contribute more significantly to government earnings.
Revenue Increases, but Distribution Remains a Controversial Issue
While the ₦1.703 trillion FAAC allocation for January 2025 represents a higher revenue inflow, questions about fairness in distribution, accountability, and effective utilization of funds remain unresolved. As state and local governments push for more equitable allocations, the Federal Government faces growing pressure to review the revenue-sharing formula to reflect the financial realities of each region. Until then, the debate over FAAC revenue allocation is unlikely to end anytime soon.
