The Federal Government has disclosed that state and local governments are receiving additional funds beyond their regular statutory allocations under the current administration, resulting in a combined surplus of about N7.1 trillion.
Minister of Finance and Coordinating Minister of the Economy, Wale Edun, made this known during a press briefing in Abuja.
Edun explained that the funds include statutory allocations and refunds for previous deductions, emphasizing that the federal government is effectively channeling savings from fuel subsidy removal to Nigerians.
“We are increasing resources available to the sub-nationals, to the states, for educational, health and infrastructure,” Edun stated. “We are making repayments of past deductions to the federation account, funds which are legitimately owed to the sub-national levels of government. Those payments are being made on a regular basis.”
He further revealed that the combined fiscal balance of states has significantly improved, growing from 1.8% of GDP (N2.8 trillion) in the first half of 2023 to 3.1% (N7.1 trillion) currently. “That means that the states have been provided funding that has now allowed them to be in surplus. And of course, that gives them the greater capacity to invest,” he said, noting that most of the increased spending by states has gone into capital expenditure.
The minister also highlighted that the federal government recently paid over N2 trillion to contractors to settle outstanding capital budget obligations from last year, with future focus shifting to 2025 capital releases.
On revenue performance, Edun stated that the government achieved 37.4% of its revenue target in the first half of 2025, saying, “Gross revenues are at 37.4% of government revenues target in the first half of 2025.”
Following GDP rebasing, he announced that Nigeria’s debt-to-GDP ratio has improved significantly, falling from 52.1% to 38.8%. To address fiscal deficits, the government plans to prioritize spending and enhance revenue generation from existing assets.
Regarding fiscal discipline, Edun noted, “When we look at the fiscal position of government and public finances, under the leadership of the president, bold steps have been taken to restore fiscal discipline and balance. We have ended the unauthorised and above limits funding by Ways and Means, which was a natural default when looking for funds to fund anything.”
The minister also disclosed plans to review collection charges by revenue agencies to boost government earnings. “We will look to review deductions from the federation account that come from things like the collections charges of various agencies, such as Customs, FIRS, NUPRC, and indeed the charges that NNPC levies for managing the Frontier Exploration Fund, and indeed as a management fee to government for managing NNPC’s activities,” he stated.