FAAC Allocation Falls N669bn To N2.34tn As Statutory Revenue Crashes

The Federal Government, 36 states and 774 local government councils shared N2.338tn from the Federation Account in September, representing a N669bn decline from the N3.007tn distributed in August.

The latest allocation, which relates to revenue generated in August 2026, was approved at the September meeting of the Federation Account Allocation Committee held in Abuja.

The Office of the Accountant-General of the Federation disclosed the figure in a statement issued on Thursday by its Director of Press and Public Relations, Bawa Mokwa.

The statement said, “A total sum of N2.338tn, being August 2026 Federation Account Revenue, has been shared to the Federal Government, States and the Local Government Councils.”

The latest distribution represents a 22.2 per cent decline from the N3.007tn shared at the previous FAAC meeting from revenue generated in July.

The decline was largely driven by a sharp contraction in statutory revenue, which more than offset the increase recorded in Value Added Tax collections during the month.

Figures contained in the FAAC communiqué showed that gross statutory revenue fell by N1.508tn, or 34.6 per cent, from N4.359tn in July to N2.850tn in August.

The communiqué stated, “Gross statutory revenue of N2.850tn was received for the month of August 2026. This was lower than the sum of N4.359tn received in the preceding month by N1.508tn.”

The decline reversed the improvement recorded in July, when gross statutory revenue increased by N658.09bn from N3.700tn in June to N4.359tn.

Despite the decline in statutory revenue, VAT collections continued to rise, increasing by N40.875bn during the period.

Gross VAT revenue rose to N834.843bn in August, representing a 5.1 per cent increase from the N793.968bn generated in July.

The Accountant-General’s office said, “Gross revenue of N834.843bn was available from the Value Added Tax in August 2026. This was higher than the N793.968bn available in the month of July 2026 by N40.875bn.”

Overall, the three tiers of government had N3.685tn in gross revenue available for the month before deductions and other statutory adjustments.

Of the amount, N125.142bn was deducted as the cost of revenue collection, while N1.221tn was accounted for through transfers, refunds and savings.

Following the deductions and adjustments, N2.338tn was left as distributable revenue to the Federal Government, states and local governments.

The distributable amount comprised N1.565tn from statutory revenue and N773.233bn from VAT.

The Federal Government received N804.897bn, while the 36 state governments collectively received N794.313bn.

The 774 local government councils were allocated N555.142bn, while N184.388bn was distributed to benefiting states as derivation revenue, representing the statutory 13 per cent share of mineral revenue.

A breakdown of the N1.565tn distributable statutory revenue showed that the Federal Government received N727.573bn, while the states and local governments received N369.035bn and N284.511bn respectively.

Benefiting states also received N184.388bn as derivation revenue from the statutory revenue pool.

From the N773.233bn distributable VAT revenue, the Federal Government received N77.323bn, while the states received N425.278bn and local governments got N270.632bn.

The FAAC communiqué also recorded mixed movements across the individual revenue sources that contributed to the Federation’s distributable income in August.

Petroleum Profit Tax, Hydrocarbon Tax, Value Added Tax, Common External Tariff levies and excise duty recorded increases during the month.

However, the gains were offset by declines in Companies Income Tax, Capital Gains Tax, Stamp Duties Tax, petroleum royalties, mineral royalties, gas-flaring penalties, import duty, rental gas-flared fees and miscellaneous oil revenue.

The latest allocation contrasts sharply with the N3.007tn distributed in August from July revenue, which was the highest monthly FAAC allocation recorded in 2026 and the largest monthly distribution in records reviewed from 2019.