FAAC ALLOCATION DROPS TO N2.34TN AS STATUTORY REVENUE SLUMPS

The Federal Government, the 36 states and the 774 local government councils shared a total of N2.338tn from the Federation Account in September 2026, representing a 22.2 per cent decline from the N3.007tn distributed in the previous month. The amount, which represents revenue generated in August, was shared at the September meeting of the Federation Account Allocation Committee in Abuja, according to the Office of the Accountant-General of the Federation.

The latest allocation was N669bn lower than the N3.007tn shared in August from July revenue. The decline was largely driven by a sharp fall in statutory revenue, which dropped by N1.508tn, or 34.6 per cent, from N4.359tn in July to N2.850tn in August. The July figure had represented a significant increase of N658.09bn from the N3.700tn recorded in June and was the highest monthly FAAC distribution recorded in 2026.

Despite the decline in statutory revenue, Value Added Tax collections recorded an increase during the period. Gross VAT revenue rose by N40.875bn, or 5.1 per cent, from N793.968bn in July to N834.843bn in August. Overall, N3.685tn in gross revenue was available for the month, but N125.142bn was deducted as the cost of collection, while N1.221tn was deducted for transfers, refunds and savings, leaving N2.338tn for distribution among the three tiers of government.

The Federal Government received N804.897bn from the total distributable revenue, while the 36 states received N794.313bn and the 774 local government councils received N555.142bn. Benefiting states also received N184.388bn as the 13 per cent derivation allocation from mineral revenue. From the N1.565tn distributable statutory revenue, the Federal Government received N727.573bn, states got N369.035bn and local governments received N284.511bn, with the N184.388bn derivation payment going to the relevant states.

For the N773.233bn distributable VAT revenue, the Federal Government received N77.323bn, while the states and local governments received N425.278bn and N270.632bn respectively. The FAAC communiqué showed mixed performances among the major revenue streams during August. Petroleum Profit Tax, Hydrocarbon Tax, VAT, Common External Tariff levies and excise duty recorded increases, while Companies Income Tax, Capital Gains Tax, Stamp Duties Tax, petroleum royalties, mineral royalties, gas-flaring penalties, import duty, rental gas-flaring fees and miscellaneous oil revenue recorded declines.