Nigeria's FAAC Deductions Reach 41% of Revenue

Over the past three years, Nigeria's federal revenue rose to N84 trillion, but 41% of this amount was lost to deductions from the Federation Account Allocation Committee (FAAC). The total gross revenue climbed to N17.08 trillion in 2023, N29.45 trillion in 2024, and N37.44 trillion in 2025, totaling N83.97 trillion.

However, deductions surged to N6.22 trillion in 2023, N13.38 trillion in 2024, and N14.93 trillion in 2025, amounting to N34.53 trillion over the three years. This represents a 41.1% deduction from total revenue, significantly shrinking the fiscal space available for development across the three tiers of government.

The World Bank noted that while revenue performance improved following economic reforms, the deductions, primarily driven by higher transfers to ministries and agencies, have eroded the net revenue available to federal, state, and local governments. The report highlights that by 2025, deductions could exceed the total revenue of several Nigerian states.