Nigeria’s nine oil-producing states earned a combined ₦1.51 trillion from the 13% derivation fund in 2025, a significant jump from ₦671.92 billion recorded in 2024. The increase reflects higher distributable oil revenues and improved inflows into the Federation Account.

The derivation fund, constitutionally set at 13% of oil revenue, is allocated to oil-producing states to compensate for environmental degradation and resource extraction within their territories.

Delta and Bayelsa Lead Payouts

Delta State emerged as the top beneficiary with ₦458.65 billion, representing nearly a third of the total distributed. Bayelsa State followed with ₦320.45 billion, while Akwa Ibom and Rivers states received ₦303.86 billion and ₦269.78 billion, respectively.

The breakdown of the 2025 derivation fund for all nine states is as follows:

• Delta: ₦458.65 billion

• Bayelsa: ₦320.45 billion

• Akwa Ibom: ₦303.86 billion

• Rivers: ₦269.78 billion

• Edo: ₦45.32 billion

• Ondo: ₦39.81 billion

• Imo: ₦34.90 billion

• Anambra: ₦20.74 billion

• Abia: ₦20.51 billion

Fiscal Profiles and Growth Trends

While the top four states rely heavily on oil-linked revenues, smaller beneficiaries like Abia recorded notable growth, with derivation receipts rising 206.5% from ₦6.69 billion in 2024 to ₦20.51 billion in 2025. Despite this gain, Abia’s fiscal mix remains dependent on statutory allocations (₦81.84 billion) and VAT receipts (₦79.24 billion).

States like Edo and Ondo also maintain diversified revenue sources, balancing statutory inflows and consumption-based taxes, even as their derivation earnings increased year-on-year.

Economic Implications

Rising derivation receipts underscore the fiscal importance of oil revenues for sub-national governments, particularly in the Niger Delta, where funds support infrastructure development and environmental remediation.

As Nigeria navigates its energy transition and economic diversification, the 13% derivation fund remains a vital, though volatile, component of fiscal federalism. The 2025 data highlights a widening revenue gap between oil-producing states and non-oil-producing counterparts across the federation.

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