Nigeria’s monthly earnings from the federation account experienced a noticeable decline in November 2025, as total inflows fell compared to what was recorded in the previous month. The reduction in revenue has once again highlighted the country’s dependence on key government agencies responsible for generating income for the national purse.
According to figures obtained from the Office of the Accountant-General of the Federation and presented during a meeting of the Federation Account Allocation Committee (FAAC) in December, the federation account received ₦2.34 trillion in November. This represents a significant drop from the ₦2.93 trillion recorded in October.
The difference between the two months amounts to a fall of about ₦591.22 billion, indicating weaker remittances from some of the country’s major revenue-collecting institutions during the period under review.
A closer look at the data shows that several agencies recorded lower contributions. For example, funds remitted by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) declined substantially, dropping from ₦873.1 billion in October to ₦660.04 billion in November.
Another major decline came from non-oil taxes handled by the Federal Inland Revenue Service (FIRS). Collections from this category reduced sharply to ₦337.22 billion, compared to ₦591.15 billion the previous month.
The Nigeria Customs Service also experienced a fall in revenue contribution. Customs earnings dropped from ₦370.28 billion in October to ₦287.17 billion in November, adding to the overall reduction in government inflows.
Other sources of revenue showed similar downward trends. Earnings from Value Added Tax (VAT) declined from ₦719.82 billion to ₦563.04 billion, while revenue generated through the Electronic Money Transfer Levy (EMTL) reduced from ₦49.86 billion to ₦43.4 billion.
Despite the widespread decline, a few agencies recorded improvements. Revenue from the Nigerian National Petroleum Company Limited (NNPCL) rose significantly to ₦44.92 billion, compared to ₦14.72 billion recorded in October.
Similarly, oil-related tax collections handled by the FIRS increased, moving up to ₦407.57 billion from ₦315.64 billion. These gains, however, were not enough to offset the broader decline in overall inflows.
Part of the revenue collected during the month also went into special allocations. For instance, ₦49.76 billion generated from gas flare penalties was directed to the Midstream and Downstream Gas Infrastructure Fund.
After all necessary adjustments and statutory deductions, the amount considered available for distribution to the three tiers of government dropped to ₦2.29 trillion, compared with ₦2.87 trillion in October.
Interestingly, deductions from the federation account were significantly lower in November. Total deductions stood at ₦365.1 billion, a sharp reduction from ₦780.45 billion recorded in the previous month.
Several factors contributed to the lower deductions. Government savings from the account reduced to ₦200 billion, while the cost of revenue collection by agencies such as FIRS, NUPRC, and the Nigeria Customs Service declined to ₦84.25 billion.
Funding allocated to the North-East Development Commission also decreased slightly during the month, dropping from ₦20.73 billion to ₦16.21 billion.
Some deductions, however, remained unchanged. Refunds tied to the 13 percent derivation for subsidy payments, priority projects, and the Police Trust Fund stayed fixed at ₦18.16 billion.
On the other hand, deductions associated with the 13 percent derivation related to NNPC management costs and frontier exploration activities dropped significantly to ₦2.87 billion, far below the ₦21.47 billion recorded in October.
Meanwhile, allocations linked to the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) increased slightly. The commission received ₦6.15 billion from non-oil revenue, alongside a separate deduction of ₦37.45 billion used to clear outstanding arrears.
When all financial adjustments were completed, the total amount shared among the federal government, state governments, and local government councils stood at ₦1.92 trillion for November 2025. This was lower than the ₦2.09 trillion distributed in October.
Commentary and Analysis
The drop in federation account revenue reflects the volatility of Nigeria’s public finances, especially when contributions from major agencies fluctuate. Since many state governments depend heavily on FAAC allocations, any decline in monthly inflows can have immediate consequences for budget execution and public spending.
The figures also highlight the continued imbalance between oil-related revenue and non-oil income sources. While Nigeria has repeatedly emphasized economic diversification, the data shows that changes in petroleum-related contributions still strongly influence the country’s fiscal outlook.
Another key observation is the importance of efficient revenue collection. The reductions in VAT, customs income, and non-oil taxes suggest possible economic slowdowns, compliance challenges, or administrative factors affecting government collections.
Going forward, financial analysts believe strengthening non-oil revenue streams will be critical for stabilizing FAAC allocations. Without consistent diversification, monthly fluctuations like the one recorded in November could continue to affect government finances across all levels.
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