September 28, (THEWILL) – Oil derivation revenue to Nigeria’s nine oil-producing states surged 125 percent in 2025, significantly outpacing growth in internally generated revenue (IGR) and widening the gap between the two revenue sources.
The nine states, Abia, Akwa Ibom, Anambra, Bayelsa, Delta, Edo, Imo, Ondo and Rivers received a combined N1.51 trillion from the 13 percent derivation fund in 2025, up from N671.92 billion in 2024.
Over the same period, their combined IGR rose 35.54 percent to N1.15 trillion from N845.25 billion.
The sharp difference in growth rates altered the balance between the two revenue streams. In 2024, the nine states generated N173.33 billion more in IGR than they received from derivation. By 2025, derivation revenue had moved N368.30 billion ahead of their combined IGR.
The shift was driven by the N842 billion increase in derivation receipts between the two years, compared with an additional N301.33 billion generated internally by the states.
While IGR therefore continued to expand, its growth was considerably slower than the increase in derivation revenue.
The strength of the derivation increase was already evident in the first five months of 2025, when the nine states received N620.23 billion from the fund, compared with N308.19 billion in the corresponding period of 2024, representing a 101.3 percent increase.
IGR Growth Varied Across States
The performance of IGR across the nine states was uneven, with most recording increases but at significantly different rates.
Rivers remained the largest generator of IGR among the group, with internally generated revenue rising by N111.12 billion, from N317.30 billion in 2024 to N428.42 billion in 2025, representing a 35.02 percent increase.
Delta followed, with IGR increasing by N44.70 billion from N157.79 billion to N202.49 billion, while Edo’s revenue rose by N41.06 billion from N91.15 billion to N132.21 billion.
Akwa Ibom’s IGR increased from N75.77 billion to N100.80 billion, representing a 33.04 percent rise, while Abia recorded a stronger percentage increase, with revenue climbing from N40.01 billion to N70.41 billion, a 75.97 percent increase.
Ondo recorded one of the largest percentage increases in the group, with IGR rising from N31.25 billion to N60.32 billion, representing a 93.02 percent increase.
Anambra’s internally generated revenue increased from N42.69 billion to N57.03 billion, while Imo recorded an increase from N25.27 billion to N43.65 billion.
Bayelsa was the only state among the nine to record a decline. Its IGR fell by N13.71 billion, from N64.01 billion in 2024 to N50.30 billion in 2025, representing a 21.42 percent decline.
The figures show that although most of the oil-producing states expanded their internally generated revenue, the pace of growth varied widely, with increases ranging from 28.33 percent in Delta to 93.02 percent in Ondo, while Bayelsa recorded a decline.
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IGR Growth Trails National Performance
The combined IGR performance of the nine oil-producing states also trailed the national growth rate in 2025.
Across Nigeria’s 36 states and the Federal Capital Territory, IGR increased 40.93 percent from N3.65 trillion in 2024 to N5.15 trillion in 2025.
The nine oil-producing states, by comparison, recorded a 35.54 percent increase, indicating that their combined internally generated revenue grew more slowly than the national average.
The gap is particularly significant because the states were not starting from a position of declining IGR. Most of them recorded higher internally generated revenue in 2025, but the increase was modest compared with the expansion in derivation receipts.
Rivers, for instance, added N111.12 billion to its IGR, the largest absolute increase among the nine states, while Ondo and Abia recorded some of the strongest percentage growth rates.
However, these gains were overshadowed at the aggregate level by the N842 billion increase in derivation revenue received by the group.
Derivation Becomes Larger Revenue Stream
The result was a significant change in the relative contribution of the two revenue sources.
In 2024, the nine states collectively generated N845.25 billion in IGR, compared with N671.92 billion received through derivation.
By 2025, derivation receipts had climbed to N1.51 trillion, while IGR stood at N1.15 trillion.
This means derivation revenue moved from being N173.33 billion below combined IGR in 2024 to N368.30 billion above it in 2025.
The change was therefore not driven by a contraction in IGR across the group. Rather, it reflected the much faster expansion of derivation revenue.
Derivation receipts increased by 125 percent during the year, compared with 35.54 percent growth in IGR.
For the nine states collectively, the difference between the two growth rates meant that revenue received from the derivation fund increased at a pace far beyond the expansion of revenue raised within their jurisdictions.
The 2025 figures consequently present two distinct trends in the revenue performance of the oil-producing states: continued improvement in internally generated revenue across most of the group, alongside a substantially stronger increase in oil derivation receipts.
The contrast is particularly evident in the movement of the aggregate figures. While the states generated an additional N301.33 billion in IGR in 2025, derivation receipts increased by N842 billion over the same period.
The result was a complete reversal in the balance between the two revenue streams within one year, with derivation revenue becoming the larger source for the nine states collectively.
The figures therefore show that the defining feature of the states’ 2025 revenue performance was not simply the increase in derivation receipts, but the extent to which their growth outpaced internally generated revenue.
Ogochukwu Onwaeze is a writer specializing in business and economic journalism. At THEWILL News Media, she translates market trends, financial developments, and policy shifts into clear and engaging stories.
