The Federation Account Allocation Committee (FAAC) has distributed a total of N1.928 trillion as federation allocation for November 2025 to the Federal Government, the 36 state governments, and the 774 local government councils across Nigeria. The allocation was approved at FAAC’s December 2025 meeting, which was chaired by the Minister of State for Finance, Dr. Doris Uzoka-Anite.

According to the official communiqué released after the meeting, the N1.928 trillion shared among the three tiers of government was drawn from a gross revenue pool of N2.343 trillion. This total revenue was generated from a combination of statutory revenue, Value Added Tax (VAT), and proceeds from the Electronic Money Transfer Levy (EMTL). Before distribution, deductions were made to cover the cost of collection, statutory transfers, interventions, and refunds, in line with existing fiscal arrangements.

From the total amount distributed, the Federal Government received N747.159 billion, while the state governments collectively received N601.731 billion. Local government councils were allocated N445.266 billion. In addition, oil-producing states received N134.355 billion as derivation revenue, representing the constitutionally mandated 13 percent share of mineral revenue.

The communiqué further showed that N84.251 billion was deducted upfront as the cost of revenue collection by the relevant agencies. Another N330.625 billion was set aside for transfers, interventions, and refunds before the final distribution to beneficiaries.

A closer look at statutory revenue reveals that gross statutory inflows for November 2025 stood at N1.736 trillion. This figure represents a significant decline of N427.969 billion compared to the N2.164 trillion recorded in the preceding month. From the statutory revenue, N59.993 billion was deducted as the cost of collection, while N273.925 billion was allocated for transfers, interventions, and refunds. The remaining balance of N1.403 trillion was shared among the three tiers of government and oil-producing states.

Under this statutory revenue distribution, the Federal Government received N668.336 billion, state governments were allocated N338.989 billion, and local government councils received N261.346 billion. Oil-producing states shared N134.355 billion as derivation revenue, underscoring the continued importance of crude oil earnings to public finances, despite ongoing efforts to diversify government revenue sources.

Revenue from Value Added Tax also declined during the month under review. Gross VAT collections for November 2025 stood at N563.042 billion, down from N719.827 billion in the previous month, reflecting a decrease of N156.785 billion. From this amount, N22.522 billion was deducted as the cost of collection, while N54.682 billion was allocated for transfers, interventions, and refunds. The remaining N485.838 billion was distributed, with the Federal Government receiving N72.876 billion, state governments N242.919 billion, and local government councils N170.043 billion.

The Electronic Money Transfer Levy contributed N43.400 billion to the distributable pool. Of this amount, the Federal Government received N5.947 billion, state governments were allocated N19.823 billion, and local government councils received N13.876 billion. Deductions totaling N1.736 billion were made for the cost of collection, while N2.018 billion went to transfers, refunds, and savings.

The FAAC communiqué also highlighted broader revenue trends for the month. While excise duty recorded a moderate increase, several key revenue lines experienced notable declines. These included Petroleum Profit Tax, Hydrocarbon Tax, Company Income Tax from both upstream and non-upstream activities, Capital Gains Tax, oil and gas royalties, import duty, CET levies, VAT, EMTL, and various fees. The declines point to ongoing pressures on government revenue amid macroeconomic adjustments, global oil market volatility, and domestic economic challenges.

FAAC meetings play a critical role in Nigeria’s fiscal framework, as they determine the monthly sharing of federally collected revenues among the three tiers of government. Earlier reports showed that Nigeria’s 36 states shared a cumulative N4.43 trillion from FAAC allocations between January and July 2025, with oil-producing states accounting for about 35 percent of total disbursements due to the derivation principle.

During that seven-month period, Delta State emerged as the highest recipient of FAAC allocations, followed by Rivers, Lagos, Akwa Ibom, and Bayelsa states. These figures continue to highlight the central role of oil revenue in subnational finances, even as fiscal authorities push for reforms aimed at strengthening non-oil revenue generation and improving long-term fiscal sustainability.

Market expectations are increasingly aligned around the prospect of an imminent US Federal Reserve rate cut, even as policymakers signal caution in their forward guidance. Investment professionals say a reduction in interest rates is now widely anticipated, but warn that the Fed’s communication strategy may remain deliberately hawkish, limiting the longer-term impact on global markets, including emerging economies such as Nigeria.

Arnold Dublin-Green, Chief Investment Officer at Cordros Asset Management, said the odds of the Federal Reserve holding rates steady at upcoming meetings appear slim, given prevailing economic conditions. According to him, current data does not present a compelling case for the central bank to delay easing.

“I think I’ll be surprised if they don’t cut. I don’t think there is anything that would require them not to,” he said. However, Dublin-Green cautioned that while a rate cut may occur, the tone adopted by Fed Chair Jerome Powell could remain conservative, a phenomenon increasingly referred to in markets as a “hawkish cut.”

He explained that such an approach would involve lowering rates while maintaining cautious rhetoric, signalling that policymakers remain vigilant about inflation risks and are not yet committing to an aggressive easing cycle. Markets, he noted, are currently pricing in between two and four rate cuts over the next year, but the Fed may prefer to move incrementally, guided by incoming inflation and labour market data rather than market expectations.

Short-term relief, long-term uncertainty

While a rate cut could offer temporary relief to global financial markets, some analysts are less optimistic about the longer-term trajectory of US interest rates. Ahmad Zuaiter, founder of Jadara Capital Partners, warned that inflationary pressures could re-emerge in the United States within the next 12 to 24 months, potentially reversing any easing gains.

“I think they’ll probably cut next year,” Zuaiter said. “But I’m actually quite bearish on rates over the one- to two-year horizon. I think inflation will be a big problem a year out in the US.”

He attributed potential inflation risks to a combination of weak regulatory oversight, the persistence of tariffs, and a weakening US dollar. In his view, these factors could push US rates higher again, potentially by as much as 100 to 200 basis points over the next two years, undermining the sustainability of any near-term accommodative stance.

Nigeria’s FX stability seen as reform-led

Turning to Nigeria, Zuaiter argued that recent improvements in exchange rate stability have been driven more by domestic policy reforms than by external factors such as dollar weakness. According to him, investor sentiment towards the naira has improved as reforms have enhanced transparency and restored confidence.

“It’s primarily reform-driven,” he said. “Investors are choosing to buy the naira. You are now comfortably in a positive real rate profile.”

He added that the naira remains significantly undervalued, despite recent gains, giving policymakers room to maintain reform momentum. At its weakest levels earlier in the year, the currency overshot its fair value, he said.

“When the naira touched N1,750 to N1,800, you really overshot,” Zuaiter noted, estimating that the currency is still “anywhere from 30 to 40 per cent cheap.”

CBN’s cautious stance gains support

Zuaiter also defended the Central Bank of Nigeria’s conservative approach to interest rates, arguing that the focus on structural disinflation is appropriate in the current environment. According to him, premature easing could undermine recent progress on price stability and investor confidence.

“They want to be conservative and make sure that inflation structurally is starting to come down,” he said, adding that interest rate changes alone may not dramatically alter liquidity conditions.

“What really changes is that the currency is undervalued, in the perception of Nigerians and foreigners,” he added, emphasizing that credibility and confidence are critical to sustaining FX stability.

Implications for Nigeria’s policy direction

Analysts say Nigeria’s monetary authorities will need to closely track developments in the US as they calibrate policy choices around interest rates, capital flows, and exchange rate management. A Fed rate cut could ease pressure on the naira by improving global risk appetite and supporting foreign portfolio inflows into Nigerian assets.

However, they caution that lingering inflation risks in advanced economies, coupled with political uncertainty in the US, could limit the magnitude and duration of these benefits. For Nigeria, this means reforms and domestic policy discipline are likely to remain more important than external tailwinds.

What you should know

Federal Reserve Chair Jerome Powell has only three policy meetings remaining before his term ends in May, adding an additional layer of uncertainty to the outlook for US monetary policy. Markets are already speculating on how a new Fed chair might reshape policy priorities.

Financial markets are currently pricing in lower future interest rates than those projected by many Fed officials, partly reflecting expectations that a nominee aligned with President Donald Trump could favour more accommodative monetary conditions.

As a result, while a Fed rate cut appears increasingly likely, the broader trajectory of global interest rates remains uncertain, reinforcing the need for cautious positioning by investors and policymakers alike.

Africa’s richest man and President of the Dangote Group, Aliko Dangote, has reignited the debate around transparency and accountability in Nigeria’s oil and gas regulatory space after openly questioning allegations that the Chief Executive Officer of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Engr. Farouk Ahmed, spent about $5 million on secondary school education for four of his children in Switzerland.

Dangote made the remarks on Sunday, December 14, 2025, during a media briefing at the Dangote Refinery in Ibeju-Lekki, Lagos, where he addressed persistent challenges facing Nigeria’s downstream petroleum sector. While the briefing covered regulatory bottlenecks, investment constraints, and sector reforms, the billionaire industrialist devoted significant attention to what he described as troubling questions around governance and regulatory credibility.

According to Dangote, the alleged expenditure raises serious red flags about public sector accountability, especially at a time when millions of Nigerians struggle to afford basic education. He argued that the scale of the reported school fees appears grossly inconsistent with the income profile of a career public servant and undermines public trust in regulatory institutions.

Dangote contrasted the alleged spending with his own personal choices, noting that even with his vast wealth, his children attended secondary school in Nigeria. He expressed disbelief that a public official could reportedly pay $5 million over six years for secondary education alone, excluding university costs, for four children.

He further stressed that such an expense should naturally attract scrutiny from tax and anti-corruption authorities. In his view, even a private individual making such payments would be required to explain the source of funds, let alone a senior government regulator whose income is publicly funded.

Beyond the personal dimension, Dangote linked the issue to broader systemic problems in Nigeria’s downstream oil and gas industry. He warned that allegations of unexplained wealth among regulators damage investor confidence, weaken regulatory authority, and create the perception that oversight decisions may be compromised by personal interests.

The industrialist also highlighted the stark contrast between elite spending and the realities faced by ordinary Nigerians, particularly in northern states such as Sokoto, where many families struggle to pay as little as ₦100,000 in secondary school fees. He argued that such inequality fuels resentment, erodes faith in government institutions, and deepens social tensions.

Calling for institutional action, Dangote urged the Code of Conduct Bureau (CCB) and other relevant authorities to investigate the matter thoroughly. Under Nigerian law, public officers are required to declare their assets upon assuming office, periodically during their tenure, and upon exit from service. Dangote emphasized that asset declarations exist precisely to address situations like this, where lifestyle and spending appear disconnected from known income.

He stated that if the allegations are denied, he is prepared to publicly back up his claims with documentary evidence, including details from the schools involved. According to him, transparency is essential to restoring credibility in regulatory oversight.

In addition to the school fees controversy, Dangote accused the NMDPRA leadership of operating under a fundamental conflict of interest. He argued that regulators should not function as traders or commercial actors within the same sector they oversee, warning that such overlaps distort pricing, weaken domestic refining, and discourage both local and foreign investment.

Dangote traced some of Nigeria’s downstream challenges to regulatory decisions made under previous administrations, which he said allowed conflicts of interest to flourish. He claimed these decisions contributed to the exit of foreign operators, persistent supply inefficiencies, and long-standing pricing distortions that the country is still struggling to correct.

The comments come amid heightened scrutiny of Nigeria’s oil and gas sector. In recent months, the House of Representatives launched investigations into alleged non-repatriation of export proceeds estimated at over $850 billion between 1996 and 2014. Separately, civil society groups such as SERAP have pressed for explanations over reported revenue shortfalls at the Nigerian National Petroleum Company Limited (NNPCL).

Together, these developments underscore a growing national push for transparency, stronger oversight, and accountability across the energy value chain. Dangote’s remarks add weight to calls for reforms that go beyond policy changes to address ethical standards and institutional trust.

Ultimately, his intervention frames the issue not merely as an individual controversy, but as a test of Nigeria’s commitment to credible regulation, investor confidence, and social equity. As pressure mounts, the response of oversight institutions may prove critical in shaping public perception of reform efforts in the oil and gas sector.