Economy
FAAC Disbursements to FG, States, Councils Jump 43% to N15trn in 2024
By Adedapo Adesanya
The Nigerian Extractive Industry Transparency Initiative (NEITI) has disclosed that the Federation Accounts Allocation Committee (FAAC) disbursements to the federal, state, and local governments rose by 43 per cent in 2024, indicating a significant rise in government revenue.
In its newly released FAAC Quarterly Review in Abuja on Tuesday, the agency a total of N15.26 trillion was shared to the three tiers of government in the year under review.
According to a statement signed by the NEITI’s Acting Director Communication and Stakeholders Management, Mrs Obiageli Onuorah, the disbursements represent a historic high in revenue distribution and a 43 per cent increase compared to previous years.
The surge was attributed to sustained fiscal reform policies of the federal government, especially the removal of fuel subsidies and liberalisation of foreign exchange (FX) system which have continued to impact positively on oil revenue remittances.
NEITI said in the year, the federal government got N4.95 trillion, the state governments received N5.81 trillion and the local governments shared N3.77 trillion, putting the total FAAC disbursements (Including Derivation Revenue) stood at N15.26 trillion.
The NEITI FAAC Quarterly Review showed that distribution to state governments in 2024 recorded the largest percentage increase of 62 per cent from N3.58 trillion in 2023, followed by local government councils with a 47 per cent increase, while the Federal Government’s share rose by 24 per cent from N3.99 trillion in 2023 to N4.95 trillion in 2024.
The report said the total FAAC allocations increased by 66.2 per cent from N9.18 trillion in 2022 to N10.9 trillion in 2023 and N15.26 trillion in 2024, with the most significant growth occurring between 2023 and 2024.
The review also called for adequate measures to manage and mitigate economic and other social risks associated with reforms in transitional economies like Nigeria.
According to the agency, such risks include: inflationary pressures, possible rise in debt servicing costs, and fiscal uncertainties for states dependent on oil revenues.
NEITI recommended that governments at all levels take innovative actions to mitigate the impact of these economic challenges.
The report also revealed that Lagos State received the highest allocation of N531.1 billion in 2024, followed by Delta (N450.4 billion) and Rivers (N349.9 billion). Conversely, Nasarawa State received the least allocation of N108.3 billion, followed by Ebonyi (N110 billion) and Ekiti (N111.9 billion).
Furthermore, six states—Lagos, Rivers, Bayelsa, Akwa Ibom, Delta, and Kano—each received over N200 billion, collectively accounting for 33 per cent of total allocations to all states, while the six lowest-receiving states—Yobe, Gombe, Kwara, Ekiti, Ebonyi, and Nasarawa—accounted for only 11.5 per cent.
The report revealed a major financial divide, with the top four states—Lagos, Delta, Rivers, and Akwa Ibom—collectively receiving N1.49 trillion, over three times more than the combined total of the bottom four states—Kwara, Ekiti, Ebonyi, and Nasarawa—which received N442.4 billion.
The review highlighted that total debt deductions for states’ foreign debts and other contractual obligations amounted to N800 billion, representing 12.3 per cent of total allocations to the 36 states, including derivation revenue.
Lagos State recorded the highest debt deduction of N164.7 billion, accounting for over 20 per cent of total deductions, while Kaduna State followed with N51.2 billion, while Rivers (N38.6 billion) and Bauchi (N37.2 billion) also recorded significant debt deductions.
The report noted that many states with high debt ratios were in the lower half of the FAAC allocation rankings but ranked higher for debt deductions, raising concerns about their debt-to-revenue ratios and overall fiscal health.
Speaking on the numbers, Mr Orji Ogbonnaya Orji, Executive Secretary of NEITI, noted that the analyses were conducted against the backdrop of major fiscal reforms that reshaped the revenue landscape, particularly the impact of subsidy removal in mid-2023 on national and sub-national finances and the consequences of debt repayment deductions on state allocations.
He said the report’s objective is to assess the sustainability of the federal and state governments’ borrowing to fund their projects and programmes, as well as the implications of natural resource dependence, particularly for states benefiting from the 13 per cent derivation revenue from oil, gas, and solid minerals.
“The analysis focused on crude oil revenue derivation states, as solid minerals continue to under-perform despite their significant potentials.”
By Aduragbemi Omiyale
The Stanbic IBTC Bank Nigeria Purchasing Managers’ Index (PMI) for the Nigerian private sector in July 2026 contracted to 52.5 points from 53.4 points in June 2026, a statement made available to Business Post has shown.
This occurred despite the business environment sustaining its growth last month, with an increase in new orders experienced, as inflationary pressures softened, and output and employment modestly rising.
The Head of Equity Research West Africa at Stanbic IBTC Bank, Mr Muyiwa Oni, said the PMI indicated that the private sector recorded its slowest since March 2026, as businesses also increased their input purchasing activity to keep up with current demand requirements and prepare for future workloads.
“Nigerian businesses reported improved customer demand in July while better pricing and new product launches also helped them to capture new orders arising from the increase in demand. These factors helped to keep the private sector activity in an expansionary territory, although this moderated when compared to June,” he was quoted as saying.
It was stated that while input costs increased at their slowest pace in five months, panellists reported higher costs for fuel and raw materials. Selling prices also softened in line with the picture for input costs in July.
Headline inflation eased slightly to 15.91 per cent y/y in June from 15.93 per cent y/y in May, snapping three consecutive months of price increases.
Although July inflation is likely to be higher m/m, it is expected to print lower, likely at 15.72 per cent y/y, primarily driven by favourable base effects from the corresponding period of last year, because there are no expectations of the magnitude of m/m inflation witnessed in July 2025 (1.99 per cent) to materialise this year.
“We retain our 2026 growth forecasts at 4.1 per cent as we see the oil sector growing by 3.45 per cent y/y in 2026, from 8.50 per cent y/y in 2025, while the non-oil sector is likely to grow by 4.11 per cent y/y, from 3.71 per cent y/y in 2025.
“The risks to our outlook include country-wide insecurity which may constrain food production, exchange rate pressures resurfacing, extreme-weather related conditions and higher fertiliser prices impacting crop yield, and a volatile global environment which may affect sentiment and constrain capital flows,” Mr Oni noted.
By Adedapo Adesanya
Sahara Upstream, a Nigeria-focused crude producer, has deployed a new 380,000-barrel tanker to boost exports from the OML 18 block as part of a wider push by domestic operators to invest in infrastructure and lift output and exports for Africa’s biggest oil producer.
The MT D Adesanya, which can hold more than 62,000 cubic metres of crude, will operate alongside the MT D Bayero, receiving crude from shuttle vessels at Bonny Anchorage, one of Nigeria’s main crude export hubs, before transferring it to the FSO Cawthorne storage facility.
Sahara said the tanker would help cut turnaround times, currently about 30 to 48 hours, and support a planned 50 per cent increase in exports from the block’s current level of about 950,000 barrels per month.
The block currently produces about 36,000 barrels per day, according to data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), with Sahara targeting output of 60,000 barrels per day.
OML 18 is one of the Niger Delta’s oldest producing assets. It began production in 1970 and contains an estimated 1.5 billion barrels of oil equivalent in reserves.
Shell, Total and Eni sold their combined interests to Eroton in 2015 as part of a broader shift toward domestic ownership in Nigeria’s upstream sector.
This development comes as Sahara Upstream is deepening its exploration and production footprint through Asharami Energy Limited (AEL), its upstream E&P business, which says it is targeting 350,000 barrels of oil per day by 2030 through its subsidiary, Enageed Resources Limited (ERL).
The growth target comes as AEL also marks a major safety milestone, achieving 6 million Lost Time Injury (LTI)-free man-hours in its OML-148 operations — reinforcing the company’s commitment to operational excellence and safety leadership.
According to Asharami Energy, the milestone reflects its ability to execute complex operations safely, in line with Sahara’s Beyond XXX vision, which builds on the group’s 30-year legacy of responsible enterprise while marking its next chapter of impact, innovation, and sustainable growth.
The developments position Sahara Upstream and its subsidiaries among the domestic operators driving increased investment in Nigeria’s oil and gas infrastructure, as the group works to scale up production and exports for Africa’s biggest oil producer.
By Aduragbemi Omiyale
One of the leading energy firms in Nigeria, Aradel Holdings Plc, has expressed its desire to optimise its enlarged portfolio and improve operational efficiency in the second half of 2026.
The company is planning to build on the success it recorded in the first half of the year, where it grew its revenue by 577 per cent to N2.5 trillion from N368.1 billion in H1 2025.
The significant rise in earnings was driven by higher production volumes together with stronger realised crude oil and gas prices, with the average at $90.4/bbl and $2.08/mmscf, respectively.
In the period under review, the Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) increased by 688 per cent to N1.4 trillion from N176.4 billion in the corresponding period of last year, while the operating profit surged by 789 per cent to N1.1 trillion from N118.6 billion due to higher revenue and crude handling income at N149.8 billion, partly offset by underlift cost and general and administrative costs.
The net cash generated from operations was N975.6 billion between January and June 2026 versus N140.8 billion in the same period of 2025, reflecting the cash generation of the enlarged organisation.
The net debt contracted by 70 per cent on a year-to-date basis to N46.5 billion from N475.1 billion as of December 31, 2025.
Aradel, in the period under consideration, improved its post-tax profit by 30 per cent to N191.0 billion from N146.4 billion, a development that impressed its chief executive, Mr Adegbite Falade, who said, “A firmer price environment supported performance, generating net cash from operating activities of N975.6 billion and a closing cash balance of N1.7 trillion.”
“Our enlarged portfolio provides more opportunities to generate stronger cash flow and returns for shareholders and unlocking that potential is our main focus.
“We reaffirm our full year production guidance of 110 – 140 kboepd and remain committed to operating responsibly in a changing energy landscape and to delivering lasting value for our stakeholders,” he stated.
