FAAC shares N2.43trn among FG, states, LGs

FAAC distributed N2.428 trillion among Nigeria's three government tiers for September 2026. That figure covers revenue accrued to the Federation Account and VAT proceeds. It matters because the allocation provides funds for the Federal Government, state governments and local government councils.

The September amount was N90 billion higher than the N2.338 trillion shared in August. The distributable total included N1.672 trillion from statutory revenue and N756.587 billion from VAT. The Federal Government received N832.242 billion, while states and local councils received N799.872 billion and N560.660 billion.

The increase came even as VAT collections declined. Gross statutory revenue rose by N246.384 billion, reaching N3.096 trillion from N2.850 trillion. Higher collections from Petroleum Profit Tax, Hydrocarbon Tax, petroleum royalties, import duty, Common External Tariff levies and excise duty helped offset weaker VAT and other receipts.

The Federation Account Allocation Committee, or FAAC, is the body that oversees the sharing of revenue available to Nigeria's federal, state and local governments. Its work matters because these tiers receive their allocations through a common process. The article reports FAAC meetings, revenue totals and the amounts allocated to each tier.

For September, FAAC shared N1.672 trillion from statutory revenue and N756.587 billion from VAT. The Federal Government received N832.242 billion. State governments got N799.872 billion, while local government councils received N560.660 billion. A further N236.049 billion went to benefiting states as derivation revenue.

This arrangement links national revenue collection with government funding at different levels. When collections change, the pool available for allocation also changes. In September, higher statutory revenue lifted the total distribution, even though VAT, Companies Income Tax, Capital Gains Tax, Stamp Duties and other listed sources declined. The article does not provide FAAC's membership or legal composition.

The N2.428 trillion distributable amount was divided among the Federal Government, state governments and local government councils. The allocation shows how the common revenue pool was distributed across Nigeria's three government tiers. It also identifies a separate 13 per cent derivation payment for states benefiting from mineral resources.

The Federal Government received N832.242 billion. State governments received N799.872 billion, and local government councils got N560.660 billion. In addition, N236.049 billion was shared among benefiting states as derivation revenue from mineral resources. The communiqué also broke the total into N1.672 trillion from statutory revenue and N756.587 billion from VAT.

The figures reflect the September distribution reported by FAAC. The derivation amount is presented separately from the allocations to the three tiers. Together, the listed amounts are approximately N2.428 trillion because the published figures are rounded. Statutory allocations and VAT allocations followed different breakdowns, but both contributed to the overall amount shared.

The total amount shared increased because statutory revenue rose strongly in September. Gross statutory revenue reached N3.096 trillion, up from N2.850 trillion in August. This increase outweighed the fall in gross VAT revenue and helped raise the combined amount available for distribution.

Gross VAT revenue dropped to N816.872 billion from N834.843 billion, a decrease of N17.972 billion. At the same time, collections from Petroleum Profit Tax, Hydrocarbon Tax, petroleum royalties, import duty, Common External Tariff levies and excise duty increased significantly. Those gains strengthened statutory revenue.

The result was a larger distributable pool. FAAC shared N2.428 trillion in September, compared with N2.338 trillion in August, an increase of N90 billion. The communiqué also reported N3.913 trillion in gross revenue, reduced by N131.758 billion in collection costs and N1.352 trillion for transfers, refunds and savings before distribution.

Statutory revenue is revenue assigned for distribution through the Federation Account, including several tax, customs and oil-related receipts listed in the report. VAT is Value Added Tax, a tax collected on value added through transactions. The two streams matter because they form the main sources of the distributable revenue reported by FAAC.

In September, gross statutory revenue was N3.096 trillion, while gross VAT revenue was N816.872 billion. After the revenue process and reported deductions, the distributable pool comprised N1.672 trillion from statutory revenue and N756.587 billion from VAT. Collections from petroleum taxes, royalties, import duty and excise duty helped statutory revenue rise.

FAAC's communiqué showed that gross revenue was N3.913 trillion. From that amount, N131.758 billion was deducted as collection cost, while N1.352 trillion went into transfers, refunds and savings. The remaining distributable revenue was then allocated among the federal, state and local governments, with VAT and statutory revenue shown separately.

The 13 per cent derivation payment is a share of mineral-resource revenue allocated to states that benefit from those resources. It matters because it gives resource-producing or resource-benefiting states a distinct payment in addition to the general allocation reported by FAAC.

In September, N236.049 billion was shared among benefiting states as derivation revenue from mineral resources. The same amount appears in the statutory revenue breakdown. It was listed separately from the N756.583 billion statutory allocation to the Federal Government, N383.749 billion to states and N295.855 billion to local councils.

The article does not name the benefiting states or provide a state-by-state breakdown. It does show that derivation revenue formed part of the overall distribution connected to statutory revenue. The payment therefore affects how the common revenue is divided, while its size depends on the mineral-resource revenue available during the period.

Government budgets depend on the revenue available for allocation. When tax, oil-related or VAT collections rise, the distributable pool can grow. When they fall, the pool can shrink, making it harder for the federal, state and local governments to fund planned activities and public services. The article reports revenue movements, but not specific service outcomes.

In September, gross VAT fell by N17.972 billion to N816.872 billion. However, Petroleum Profit Tax, Hydrocarbon Tax, petroleum royalties, import duty, Common External Tariff levies and excise duty increased significantly. Statutory revenue consequently rose by N246.384 billion, helping FAAC share N2.428 trillion.

The immediate effect was a larger allocation than in August. The longer-term position remains tied to future collections and deductions. CIT, CGT, Stamp Duties, mineral royalties, gas-flaring penalties, fees and miscellaneous oil revenue also declined considerably. Further weakness could reduce allocations, while stronger collections could increase funds available to each government tier.