Nigeria's Federation Account Records N35 Trillion Inflows in 2025
The Federation Account of Nigeria witnessed a substantial increase in financial inflows during the 2025 fiscal year, reaching an impressive total of over N35 trillion. This represents a significant rise from the N27 trillion recorded in the previous year, 2024, according to official data released by the Office of the Accountant-General of the Federation.
Substantial Growth Attributed to Fiscal Reforms
Accountant-General of the Federation, Shamseldeen Ogunjimi, revealed that the N35 trillion figure marks an increase of approximately N8 trillion, equivalent to a 29.63% growth compared to the 2024 figures. During his presentation at the Federation Account Allocation Committee (FAAC) post-mortem subcommittee retreat held in Enugu, Ogunjimi attributed this remarkable growth to the comprehensive fiscal reforms implemented under the administration of President Bola Tinubu.
The accountant-general emphasized that this improvement signals progress toward building a more resilient Nigerian economy that is less dependent on the volatility of oil revenues. He described the federation account as the fiscal lifeline of Nigeria's federal system, serving as the primary channel for mobilizing, pooling, and distributing national resources among federal, state, and local governments.
Persistent Challenges and Revenue Leakages
Despite the positive growth figures, Ogunjimi issued a warning about persistent challenges that continue to undermine the efficiency and credibility of the federation account. He identified several key issues including revenue shortfalls, volatility in oil receipts, weak non-oil revenue performance, and systemic leakages that affect the overall financial system.
The accountant-general specifically highlighted that revenue leakages are not abstract issues but specific and measurable losses that occur at critical points in the financial process. These losses primarily manifest during the collection, remittance, and expenditure oversight stages, reducing development opportunities and weakening public trust in government financial management.
Government Commitment to Improved Management
Minister of State for Finance, Doris Uzoka-Anite, who was represented at the retreat by Ali Mohammed, Director of Home Finance, assured participants of the federal government's commitment to equity, fairness, and justice in the management of the federation account. She expressed confidence that the retreat's deliberations would strengthen existing mechanisms and improve how the federation account serves all Nigerians.
Mohammed Shehu, Chairman of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), noted through his representative, Eyo-Nsa Whiley, Vice-Chairman of the FAAC post-mortem subcommittee, that resources available for distribution among the three tiers of government are increasingly shaped by economic performance and a wide range of fiscal, sectoral, and legislative reforms.
Broader Economic Context and Public Response
The increased federation account inflows come amid President Tinubu's announcement of enhanced federal allocations for states and local governments, aimed at improving services and governance across the country. The president has emphasized grassroots development as crucial to addressing insecurity and national crises, particularly following the Supreme Court ruling on local government autonomy.
However, many Nigerians have expressed skepticism regarding how local governments will utilize these increased funds and whether there will be adequate compliance mechanisms at the grassroots level to ensure proper allocation and expenditure of resources.
The FAAC retreat in Enugu focused specifically on assessing fiscal and sectoral policies designed to close revenue leakages in the federation account, reflecting the government's recognition of the need for improved financial management systems to sustain the positive revenue trends witnessed in 2025.
