By FBNQuest Research
According to the latest communiqué issued by the Federation Account Allocation Committee (FAAC), total revenue disbursements to the three tiers of government in July 2025 (from June revenue) rose by 10% month-on-month (MoM) to over N1.8trn.
This marks the highest monthly allocation for as far back as we can track. In absolute terms, the FAAC distribution for June increased by nearly N160bn m/m in comparison to N1.7trn allocated the previous month.
The modest MoM increase was primarily driven by an 18% MoM rise in statutory revenue collections to over N1trn.
Additionally, the inclusion of N100bn from non-mineral revenue further supported the higher FAAC receipts, while the N18m MoM increase in electronic transfer levy to N29bn had only a modest effect.
However, exchange rate gains exerted downward pressure on overall revenue, declining to N39bn from N77bn registered in the preceding month.
The lower m/m contribution can be explained by the relative stability of the exchange rate during the review period, as the naira appreciated by 3.5% m/m to close at N1,532.00 per USD.
The reduced exchange rate pressure is attributable to the CBN’s sustained sales of FX to support FX market liquidity.
Revenue from value-added tax (VAT) also decreased by -9% MoM to almost N632bn, reflecting a downturn in consumer spending.
Regarding disbursements, allocations to the FGN grew by 20% MoM (or N107bn m/m) to almost N645bn.
Similarly, allocations to state and local governments increased by a modest 5% m/m and 6% m/m to NGN607bn and N445bn, respectively.
Compared with the FGN, the lower allocations to states and local governments primarily reflect the dominance of statutory revenue in overall disbursements.
In contrast, the 13% derivation fund for oil-producing states declined modestly by -2% m/m to N121bn, reflecting lower collections from oil-related revenues.
Looking ahead, if the rise in Nigeria’s crude oil output observed in June is sustained, it could result in a notable improvement in government revenue.