By Julius Peter, Abuja
The Federal Government, state governments and local government councils have shared a total of ₦2.428 trillion as revenue allocation for September 2026 from a gross revenue of ₦3.913 trillion, following the October meeting of the Federation Account Allocation Committee (FAAC).
According to a press release issued by the Federal Ministry of Finance on Thursday, October 15, 2026, the allocation comprised revenue from statutory sources and Value Added Tax (VAT), with the three tiers of government receiving their respective shares in line with the revenue-sharing arrangements.
The meeting was chaired by the Accountant-General of the Federation, Shamsudeen B. Ogunjimi.
A breakdown of the allocation showed that the Federal Government received ₦832.242 billion, while the state governments received ₦799.872 billion. Local government councils were allocated ₦560.660 billion, while oil-producing states received ₦236.049 billion as the 13 per cent derivation fund from mineral revenue.
The committee also disclosed that ₦131.758 billion was deducted for the cost of revenue collection, while ₦1.353 trillion was allocated to transfers, refunds and savings.
The allocation comes against the backdrop of varying revenue performance across major sources, with statutory revenue recording an increase compared with the preceding month, while VAT receipts declined.
The FAAC communiqué indicated that gross revenue from Value Added Tax stood at ₦816.872 billion in September 2026, compared with ₦834.843 billion shared in the preceding month.
This represented a decline of approximately ₦17.972 billion, reflecting a reduction in the VAT revenue available for distribution.
From the September VAT revenue, ₦23.576 billion was allocated for the cost of collection, while ₦36.709 billion was set aside for transfers, refunds and savings.
The remaining ₦756.587 billion was distributed among the three tiers of government.
Under the VAT allocation arrangement, the Federal Government received ₦75.659 billion, while state governments received ₦416.123 billion. Local government councils were allocated ₦264.805 billion.
The figures showed that state governments received the largest share of the distributable VAT revenue, followed by local government councils and the Federal Government.
The decline in VAT receipts could have implications for the revenue available to governments for financing public services and development projects, particularly as the three tiers continue to depend on Federation Account allocations to support their respective budgets.
In contrast to the decline in VAT receipts, gross statutory revenue recorded a significant increase during the period under review.
According to the communiqué, gross statutory revenue for September stood at ₦3.097 trillion, compared with ₦2.850 trillion recorded in the preceding month.
This represented an increase of ₦246.384 billion, indicating improved receipts from statutory revenue sources.
After the relevant deductions, including the cost of collection and allocations for transfers, refunds and savings, the balance available for distribution as statutory revenue stood at approximately ₦1.672 trillion.
The distribution showed that the Federal Government received ₦756.583 billion, while state governments received ₦383.749 billion.
Local government councils were allocated ₦295.855 billion, while oil-producing states received ₦236.049 billion as their 13 per cent derivation revenue.
The derivation allocation is intended to provide oil- and mineral-producing states with a constitutionally recognised share of revenue generated from natural resources within their areas.
The statutory revenue allocation therefore accounted for a substantial portion of the total funds shared by the three tiers of government for September.
The communiqué identified mixed performances across the revenue-generating sectors, with several petroleum-related revenue streams recording increases while other sources experienced declines.
Petroleum Profit Tax (PPT), Hydrocarbon Tax (HT), petroleum royalties, import duty, Common External Tariff (CET) levies and excise duty recorded significant increases during the month.
However, Companies Income Tax (CIT), Stamp Duties Tax (SDT), Value Added Tax, mineral royalties, gas-flaring penalties, rentals, gas-flaring-free revenue and miscellaneous oil revenue recorded considerable decreases.
The mixed performance highlights the different trends affecting the major revenue sources available to the Federation Account.
While improved receipts from petroleum taxes and royalties, as well as import-related revenue, contributed to the increase in statutory revenue, the decline in VAT and some other revenue streams moderated the overall performance.
The communiqué did not provide a detailed breakdown of the individual increases and decreases recorded by each revenue source.
The monthly FAAC allocation remains a major source of funding for the Federal Government, state governments and local government councils, many of which rely on Federation Account revenue to meet recurrent expenditure and finance capital projects.
The ₦2.428 trillion allocation is expected to support government spending obligations, including salaries, infrastructure development, education, healthcare, security, social services and other public-sector responsibilities.
For state governments, the ₦799.872 billion allocation provides resources for meeting their respective budgetary commitments, while the ₦560.660 billion allocated to local government councils is expected to support grassroots administration and service delivery.
The Federal Government’s allocation of ₦832.242 billion will also contribute to financing its national obligations.
However, the actual impact of the allocation on public spending will depend on the individual governments’ budgetary priorities, expenditure commitments and revenue-management practices.
The figures also underscore the importance of strengthening domestic revenue mobilisation and improving the stability of revenue sources, particularly as fluctuations in oil-related earnings, taxation and consumption-related receipts can affect the funds available for distribution.
The FAAC communiqué put the distributable statutory revenue for September at approximately ₦1.672 trillion, while distributable VAT revenue stood at ₦756.587 billion.
Together, the two revenue components produced a total distributable allocation of approximately ₦2.428 trillion.
The figures released by the Federal Ministry of Finance show that statutory revenue remained the dominant component of the distributable funds, accounting for a substantially larger amount than VAT.
The committee’s disclosure provides an update on the Federation Account’s revenue performance and the distribution of funds among the three tiers of government.
The press release was signed by Francis Kusa, Chief Information Officer, Information and Public Relations, Federal Ministry of Finance, and dated October 15, 2026.
