The latest report from the National Bureau of statistics (NBS) shows a total of ₦3.83 trillion was disbursed to federal, states and local governments in August . A close look at the report reveals that over 80% of the distributable funds remain tied to the Statutory Account, confirming Nigeria’s persistent reliance on oil and commodity earnings despite years of focused efforts toward economic diversification.
Federation Account Allocation Committee (FAAC) disbursement, based on revenue generated in July, shows that the Statutory Account contributed ₦3.07 trillion to the total pool. This figure constitutes approximately 80.16% of the gross distributable revenue, underlining the nation’s entrenched vulnerability to global oil price volatility and production issues.
The report shows that the Federal Government (FGN) received ₦735.08 billion, 36 states received ₦660.34 billion total allocations, and Local Government Councils (LGCs) ₦485.03 billion.
Additionally, the sum of ₦120.35 billion was shared among the Niger delta oil-producing states under the 13% derivation fund.
While revenues from non-oil sources are collected, they play a comparatively minor role in funding the monthly FAAC distribution. The combined non-oil streams struggled to collectively match the volume of the Statutory Account:
The combined non-oil contribution of approximately ₦727.09 billion is dwarfed by the oil-driven portion, highlighting the vast gap that non-oil sectors must bridge to achieve true fiscal stability within the Federation Account sharing mechanism.
The FAAC figures present a paradox when viewed against the backdrop of the government’s structural reform agenda, which has recently generated “unprecedented growth” in non-oil revenue collections.
In June, the Nigerian government enacted landmark tax reform bills to boost non-oil revenue generation and streamline tax administration.
President Bola Tinubu has often boasted about the success of these tax reforms; a statement posted by presidential spokesman bayo onanuga claimed that non-oil revenue collections reached ₦20.59 trillion from January to August 2025—a 40.5% increase from the previous year which recorded ₦14 trillion .
“This strong performance aligns with projections, placing the government firmly on course to achieve its annual non-oil revenue target.” The statement read.
However, the continued reliance on the Statutory Account for the bulk of the monthly FAAC disbursements suggests that while total non-oil revenue collection is growing, the primary pool of funds shared between all three tiers of government remains dominated by oil.
This reinforces the need for continued, deep structural reforms to ensure that non-oil revenue does not just grow but becomes the dominant source of funds injected into the monthly Federation Account for national distribution.
