In what appears a significant development for the nation’s fiscal operations, the Federal Government, States, and Local Government Councils have shared a total of ₦1.424 trillion as December 2024 revenue, marking a critical moment in Nigeria’s economic trajectory.
The allocation was finalised during the January 2025 meeting of the Federation Account Allocation Committee (FAAC) held in Abuja, according to a statement by the Director of Press and Public Relations, Office of the Accountant General of the Federation (OAGF), Bawa Mokwa.
Revenue Breakdown: Federal, State, and Local Allocations
The ₦1.424 trillion distributable revenue includes:
₦386.124 billion in statutory revenue,
₦604.872 billion from Value Added Tax (VAT),
₦31.211 billion from the Electronic Money Transfer Levy (EMTL), and
₦402.714 billion in exchange difference revenue.
The Federal Government received ₦451.193 billion, States ₦498.498 billion, and Local Government Councils ₦361.754 billion, while ₦113.477 billion was allocated to oil-producing states as 13% derivation .
The communiqué released by FAAC revealed a total gross revenue of ₦2.310 trillion for December 2024. However, statutory revenue decreased sharply to ₦1.226 trillion, down by ₦600.988 billion from November’s ₦1.827 trillion.
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Conversely, VAT collections rose to ₦649.561 billion, representing a ₦20.588 billion increase compared to November 2024. The EMTL also posted gains, reflecting broader adoption of digital payment systems.
Sectoral Revenue Insights
Statutory Revenue: Federal Government: ₦167.690 billion; States: ₦85.055 billion; LGAs: ₦65.574 billion; Oil-producing States: ₦67.806 billion.
VAT Revenue: Federal Government: ₦90.731 billion; States: ₦302.436 billion; LGAs: ₦211.705 billion.
EMTL Revenue: Federal Government: ₦4.682 billion; States: ₦15.605 billion; LGAs: ₦10.924 billion.
Exchange Difference Revenue: Federal Government: ₦188.090 billion; States: ₦95.402 billion; LGAs: ₦73.551 billion; Oil-producing States: ₦45.671 billion.
Revenue Drivers and Challenges
While VAT and EMTL revenues posted gains, there were notable declines in key revenue streams such as Oil and Gas Royalties, Petroleum Profit Tax (PPT), and Companies Income Tax (CIT). This reflects ongoing challenges in the oil and gas sector and underscores the need for diversification and fiscal reforms.
Implications for Economic Stability
The distribution of funds comes at a time of economic recalibration under the administration of President Bola Tinubu, as Nigeria grapples with declining oil revenues and rising debt obligations.
The improved VAT and EMTL revenues signal progress in tax administration and digital payment adoption, but the sharp drop in statutory revenues highlights vulnerabilities in the traditional revenue streams.
As Nigeria moves forward, efficient utilisation of allocated funds will be critical in addressing infrastructure deficits and boosting economic resilience. The FAAC’s January 2025 revenue allocation is both a testament to ongoing fiscal reforms and a reminder of the challenges that remain.
