Lower Revenue For Govts As FAAC Allocation Falls By 22% To N2.338trn

Nigeria’s August revenue fell sharply as statutory collections declined by N1.508 trillion, meaning lower revenue for the three tiers of government

The development came as the federal government, the 36 states and the 774 local government councils shared N2.338 trillion from the Federation Account Allocation Committee (FAAC), for August 2026, representing a 22 per cent decline over the N3.0 trillion distributed for July.

The allocation was approved at the September meeting of the FAAC, held in Abuja on Thursday.

According to the FAAC communiqué, gross statutory revenue fell to N2.850 trillion in August from N4.359 trillion recorded in July, representing a decline of N1.508 trillion.

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

The Communique, issued by Bawa Mokwa, Director of Press and Public Relations, VAT, however, recorded an improvement during the period as gross revenue of N834.843 billion was available from the Value Added Tax (VAT) in August 2026.

It added that the figure was higher than the N793.968 billion available in the month of July 2026 by N40.875 billion.

Also, the contrasting movements in the two major revenue streams shaped the N2.338 trillion eventually distributed among the three tiers of government.

The total distributable revenue comprised N1.565 trillion in statutory revenue and N773.233 billion in distributable VAT revenue.

The Federal Government received N804.897 billion from the total allocation, while the state governments received N794.313 billion. Local government councils received N555.142 billion.

In addition, N184.388 billion was shared among the benefiting states as 13 per cent derivation revenue from mineral resources.

The communiqué stated that “from the N2.338 trillion total distributable revenue, the Federal Government received total sum of N804.897 billion and the State Governments received total sum of N794.313 billion.”

It added: “The Local Government Council received N555.142 billion, while the sum of N184.388 billion (13% of mineral revenue) was shared to the benefiting State as derivation revenue.”

A breakdown of the statutory component showed that the Federal Government received N727.573 billion, while the states received N369.035 billion. Local government councils received N284.511 billion, with N184.388 billion allocated as derivation revenue.

For the VAT component, the Federal Government received N77.323 billion from the distributable pool of N773.233 billion. The states received N425.278 billion, while local government councils received N270.632 billion.

The communiqué said, “From the N773.233 billion distributable Value Added Tax (VAT) revenue, the Federal Government received N77.323 billion, the State Governments received N425.278 billion, and the Local Government Councils received N270.632 billion.”

The total revenue available before deductions stood at N3.685 trillion in August. However, N125.142 billion was deducted as the cost of collection, while N1.221 trillion was allocated to transfers, refunds and savings.

According to the committee, “Total deduction for cost of collection was N125.142 billion while total transfers, refunds and savings” amounted to N1.221 trillion.

The communiqué noted that “Petroleum Profit Tax (PPT), Hydrocarbon Tax (HT), Value Added Tax (VAT), CET Levies and Excise Duty increased significantly” during August.

“Companies Income Tax (CIT), CGT, SDT, Petroleum Royalties, Mineral Royalties, and Gas Flared Penalty, Import Duty, Rental Gas Flared Fee and Misc. Oil Revenue decreased considerably.”