By Julius Peter, Abuja
The Federation Account Allocation Committee (FAAC) has shared a total of N2.338 trillion among the Federal Government, the 36 states and the 774 Local Government Councils as revenue for August 2026.
The figure represents a 22.2 per cent decline from the N3.007 trillion shared in July, translating to a reduction of about N669 billion in the amount available for distribution to the three tiers of government.
The latest allocation was announced at the September 2026 FAAC meeting held in Abuja, according to a statement issued by the Director of Press and Public Relations in the Office of the Accountant-General of the Federation, Bawa Mokwa.
The August allocation comprised N1.565 trillion in distributable statutory revenue and N773.233 billion from Value Added Tax (VAT).
The sharp decline in the total allocation was largely driven by a substantial fall in statutory revenue during the month.
According to the FAAC communiqué, gross statutory revenue fell to N2.850 trillion in August from N4.359 trillion in July, representing a decline of N1.508 trillion, or 34.6 per cent.
The development contrasts with the strong revenue performance recorded in July, when statutory revenue increased by N658.087 billion, or 17.8 per cent, from N3.700 trillion in June to N4.359 trillion. The July figure helped push total FAAC disbursement above the N3 trillion mark for the first time in 2026.
Despite the decline in statutory revenue, Value Added Tax collections recorded an increase in August.
The communiqué showed that N834.843 billion was generated as gross VAT revenue during the month, compared with N793.968 billion in July.
This represents an increase of N40.875 billion, or 5.1 per cent.
The rise in VAT collections, however, was not enough to offset the significant reduction in statutory revenue, resulting in the overall decline in the amount available for distribution.
In all, a gross revenue of N3.685 trillion was available in August.
Of this amount, N125.142 billion was deducted as the cost of revenue collection, while N1.221 trillion was accounted for as transfers, refunds and savings.
After the deductions, N2.338 trillion was available for distribution to the three tiers of government.
A breakdown of the allocation showed that the Federal Government received N804.897 billion, while the 36 state governments received N794.313 billion.
The 774 Local Government Councils received N555.142 billion, while N184.388 billion, representing the 13 per cent derivation revenue from mineral resources, was allocated to benefiting states.
The distribution underscores the importance of FAAC revenue to the financing of government activities at the federal, state and local levels.
From the N1.565 trillion distributable statutory revenue, the Federal Government received N727.573 billion, the states received N369.035 billion, while the Local Government Councils received N284.511 billion.
The additional N184.388 billion in derivation revenue was distributed to the benefiting states.
From the N773.233 billion distributable VAT revenue, the Federal Government received N77.323 billion, the states received N425.278 billion, while the Local Government Councils received N270.632 billion.
The FAAC communiqué also showed that the country’s major revenue streams recorded mixed performances during August.
Petroleum Profit Tax, Hydrocarbon Tax, Value Added Tax, Common External Tariff levies and Excise Duty recorded significant increases during the period.
However, revenue from Companies Income Tax, Capital Gains Tax, Stamp Duty Tax, petroleum royalties, mineral royalties, gas-flaring penalties, import duty, rental gas-flared fees and miscellaneous oil revenue recorded considerable declines.
The divergent performance of the revenue sources contributed to the sharp month-on-month reduction in the total amount available for sharing.
The reduction in FAAC receipts comes after an unusually strong July allocation, when the Federal Government, states and local councils shared N3.007 trillion.
The July distribution had been described as the highest monthly FAAC allocation recorded in 2026 and the largest in the reviewed records dating back to 2019.
The latest decline therefore highlights the volatility of federally distributable revenue and the importance of fiscal planning by the three tiers of government.
For states and local governments that depend heavily on monthly FAAC receipts to finance salaries, infrastructure, social services and other recurrent obligations, fluctuations in federal revenue can have a direct effect on their available fiscal space.
The August figures also reinforce the continuing importance of broadening Nigeria’s revenue base beyond volatile statutory and petroleum-linked sources, particularly as VAT collections showed comparatively stronger performance during the month.
Overall, the August FAAC distribution brings the latest monthly revenue picture back below the N3 trillion level recorded in July, with the decline largely reflecting the sharp contraction in statutory revenue despite improved VAT receipts.
