FAAC: FG, States and LGAs Share Record N3.007tn in July

The Federal Government, the 36 states and 774 local government areas shared a record N3.007tn from the Federation Account in July 2026, marking the highest monthly allocation ever distributed by the Federation Account Allocation Committee.

The record allocation was approved during the August FAAC meeting held in Owerri, Imo State, following a significant increase in statutory revenue available for distribution.

According to figures from the Office of the Accountant-General of the Federation, gross statutory revenue rose to N4.359tn in July from N3.700tn in June, representing an increase of N658.087bn, or 17.8 per cent.

The growth was supported by stronger receipts from petroleum-related sources and several non-oil revenue streams. However, gross Value Added Tax revenue fell slightly to N793.968bn from N799.746bn recorded in June.

Revenue from Petroleum Profit Tax, Hydrocarbon Tax, Companies Income Tax, Capital Gains Tax, Stamp Duty, petroleum royalties, mineral royalties, excise duty and gas-flaring penalties increased during the month.

The gains were partly offset by declines in VAT, import duties, Common External Tariff levies, gas-flaring fees and some miscellaneous oil revenue.

The July distribution is not only the highest FAAC allocation recorded so far in 2026 but also the largest monthly allocation in the reviewed records from 2019 to July 2026.

The increase comes amid ongoing fiscal reforms, including petrol subsidy removal, foreign exchange reforms and efforts by the government to expand the country’s tax base.

At the meeting, officials stressed that the rising allocations should be used to strengthen state economies, improve infrastructure, develop human capital and provide better social services rather than simply increase government spending.

Governments at all levels were encouraged to improve internally generated revenue, develop public assets, attract private investment, expand economic activity and strengthen transparency in public financial management.

The meeting also reviewed changes introduced by the Nigeria Tax Act 2025, which came into effect on January 1, 2026. Under the new VAT sharing arrangement, states now receive 55 per cent of VAT revenue, up from 50 per cent, while the Federal Government’s share has been reduced from 15 per cent to 10 per cent.

In addition, 30 per cent of the states’ VAT pool is to be distributed according to the location of consumption rather than the registered headquarters of companies.

FAAC also called for stronger compliance by Ministries, Departments and Agencies in collecting and remitting revenues into the Federation Account.

The committee stressed the importance of diversifying government revenue away from crude oil, with greater attention to solid minerals and other non-oil revenue sources.

With the July allocation, the three tiers of government have now shared N15.997tn through FAAC between January and July 2026.

The committee urged governments to take advantage of the increased revenue to fund productive projects and implement reforms capable of improving public finances, strengthening economic growth and raising the standard of living for Nigerians.

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