Ndubuisi Francis in Abuja
The Federation Account Allocation Committee (FAAC) has approved the disbursement of a total sum of N3.007 trillion revenue generated in July to the federal government, the 36 states, and 774 local governments.
The approval was given at FAAC’s monthly meeting for August 2026, which took place in Owerri, the Imo State capital.
FAAC also reviewed developments in the country’s fiscal landscape and measures to strengthen revenue mobilisation and public financial management.
A statement issued on Tuesday by Director, Press and Public Relations, Office of the Accountant-General of the Federation, Bawa Mokwa, cited a communique issued during the meeting.
Of the total allocation, the federal government received N1.146 trillion, the 36 states received N943.352 billion, while the 774 local governments received N673.649 billion
The sum of N243.478 billion, representing the 13 per cent derivation revenue from mineral resources, was shared among benefiting states.
The July figures showed a significant improvement in statutory revenue.
Gross statutory revenue rose to N4.359 trillion, representing an increase of N658.087 billion, or 17.8 percent, from the N3.700 trillion recorded in June.
But, gross Value Added Tax (VAT) revenue remained relatively stable at N793.968 billion in July, declining marginally by N5.778 billion, or 0.7 per cent, from N799.746 billion in June.
FAAC said the increase in statutory revenue was driven by stronger collections from several revenue streams, including Petroleum Profit Tax, Hydrocarbon Tax, Companies Income Tax, Capital Gains Tax, Stamp Duty Tax, petroleum royalties, mineral royalties, excise duty, and gas flared penalties.
The gains were, however, partly moderated by declines in VAT, import duty, Common External Tariff levies, rental of gas flared fees, and miscellaneous oil revenue.
The committee said it would continue to work with revenue-generating agencies to address collection gaps and improve remittance discipline.
FAAC also reaffirmed its commitment to ensuring full, transparent, and timely remittance of collectible revenue by all revenue-generating agencies into the Federation Account, particularly ahead of the planned accounts reconciliation exercise.
It stressed the need to diversify Nigeria’s revenue base beyond oil through stronger tax administration and non-oil revenue mobilisation, while identifying solid minerals and other non-oil royalty streams as areas with significant growth potential.
The meeting, held on the margins of the ongoing National Council of Federation and Economic Development (NACOFED), also focused on converting the recent growth in federation revenue into sustainable fiscal strength across the three tiers of government.
As part of the deliberations, Commissioners of Finance and Accountants-General participated in a dedicated session on subnational fiscal fitness, with emphasis on strengthening public finances and ensuring that increased allocations translate into sustainable development and social investments.
The committee stated that gross FAAC allocations had risen significantly over the past three years, driven largely by subsidy removal, exchange-rate unification, and tax reforms.
It also highlighted the impact of the Nigeria Tax Act 2025, which took effect on January 1, 2026.
Under the new framework, states’ share of VAT revenue increased from 50 per cent to 55 per cent, while the federal government’s share declined from 15 per cent to 10 per cent.
In addition, 30 per cent of the states’ VAT pool was now distributed according to the place of consumption rather than the location of a company’s registered headquarters, creating a stronger link between economic activity within a state and its federation revenue allocation.
FAAC urged federal and state governments to focus on six key areas described as vital signs of fiscal strength: revenue quality, asset strength, economic growth, capital attraction, human capital, and institutional transparency.
The committee called on governments to diversify internally generated revenue beyond narrow tax bases, identify and put idle public assets to productive use, and strengthen economic growth measurement through the development of official state Gross Domestic Product data.
It also urged the states to create stable and predictable business environments capable of attracting investment, while sustaining investments in education and healthcare as foundations for long-term economic development.
On public financial management, FAAC encouraged all tiers of government to maintain timely, audited, and transparent public accounts.
It called for comprehensive asset registers, payroll verification, and timely publication of audited accounts within the next 12 months.
The committee stressed that sustaining the gains recorded in statutory revenue would depend on continued discipline in revenue collection and remittance by Ministries, Departments and Agencies.
FAAC reiterated its support for reforms designed to improve the predictability, transparency, and growth of allocations to the federal, states, and local governments.