The monthly allocation to the three tiers of government from the Federation Account Allocation Committee (FAAC) has dropped for the third consecutive month in March.
The committee, had in a communique, at the end of its April meeting, announced a total of N1.578 trillion shared among the three tiers of government as revenue generated in March 2025.
This shows that the shareable revenue recorded another decline from N1.678 trillion in February and N1.703 trillion in January.
The drop in allocations have raised concerns about fiscal sustainability, especially for state and local governments that rely heavily on these monthly disbursements for salaries and capital expenditure.
According to the communique, the distributable revenue comprised statutory revenue, Value Added Tax (VAT), Electronic Money Transfer Levy (EMTL), and exchange difference earnings.
However, in spite a modest rise in gross statutory inflows for the month, the final distributable sum continued on a downward trend, weighed down by reduced VAT and EMTL receipts.
Out of the N1.578 trillion shared for the month of March, the Federal Government received N528.696 billion, state governments got N530.448 billion, and local government councils received N387.002 billion. An additional N132.611 billion was allocated to oil-producing states as 13 per cent derivation revenue.
Statutory revenue formed the largest share at N931.325 billion, from which the Federal Government received N422.485 billion, the states N214.290 billion, and local councils N165.209 billion. A derivation component of N129.341 billion was also drawn from statutory revenue.
For VAT revenue, which totalled N593.750 billion, the Federal Government received N89.063 billion, the states N296.875 billion, and the local councils N207.813 billion. The Federal Government also received N3.746 billion from the N24.971 billion EMTL, while states and local governments received N12.485 billion and N8.740 billion, respectively.
From the N28.711 billion in exchange difference revenue, the Federal Government took N13.402 billion, the states N6.798 billion, and the local councils N5.241 billion. An additional N3.270 billion was disbursed as derivation revenue from this category.
The total gross revenue available in March 2025 stood at N2.411 trillion, from which N85.376 billion was deducted as the cost of collection and N747.180 billion for statutory transfers, refunds, and interventions. This left the distributable pool at N1.578 trillion, the lowest since the start of the year.
While gross statutory revenue rose to N1.718 trillion in March, up from N1.653 trillion in February, VAT collection fell. Gross VAT revenue declined from N654.456 billion in February to N637.618 billion in March, reflecting a shortfall of N16.838 billion.
FAAC attributed the decline in total distributable revenue to reductions in oil and gas royalty, VAT, EMTL, excise duty, import duty, and Common External Tariff (CET) levies.
However, it noted that Petroleum Profit Tax (PPT) and Companies Income Tax (CIT) recorded significant growth during the month under review
