Aniefiok Christopher
Despite a sharp fall in statutory revenue during the month, the Federal Government, States and local government councils shared N2.338 trillion from the Federation Account as revenue for August 2026.
A communiqué by Federation Account Allocation Committee (FAAC) approved the amount for distribution at its September meeting in Abuja, saying that the total distributable revenue comprised N1.565 trillion in statutory revenue and N773.233 billion from Value Added Tax (VAT).
The Director of Press and Public Relations in the Office of the Accountant-General of the Federation, Mr Bawa Mokwa, who announced the figures in a statement on Thursday, said revenue sharing followed the Federation Account’s gross revenue of N3.685 trillion 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, leaving N2.338 trillion for distribution among the three tiers of government and benefiting states under the derivation principle.
The Federal Government got N804.897 billion from the total distributable revenue, while the 36 state governments collected N794.313 billion.
The local government councils collected N555.142 billion, while N184.388 billion, representing 13 per cent derivation from mineral revenue, was distributed to the benefiting states.
The figures showed that statutory revenue remained the largest component of the distributable funds, although the amount generated before distribution dropped substantially from the previous month.
Gross statutory revenue stood at N2.850 trillion in August, down by N1.508 trillion from the N4.359 trillion recorded in July.
The decline in statutory revenue was partly offset by stronger VAT receipts. Gross VAT revenue available for distribution rose to N834.843 billion in August from N793.968 billion in July, representing an increase of N40.875 billion.
The breakdown of the N1.565 trillion statutory revenue showed that the Federal Government received N727.573 billion, while the states received N369.035 billion.
While the local governments received N284.511 billion, N184.388 billion was distributed to the benefiting states as derivation revenue.
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From the N773.233 billion distributable VAT revenue, the Federal Government received N77.323 billion, while the states received N425.278 billion. The local government councils received N270.632 billion from the VAT pool.
The month’s revenue performance reflected mixed movements across the major sources of government income.
According to the FAAC communiqué, receipts from Petroleum Profit Tax, Hydrocarbon Tax, VAT, Customs and Excise Duty increased significantly during August.
These gains, however, were accompanied by considerable declines in Companies Income Tax, Capital Gains Tax, Stamp Duty Tax, petroleum royalties, mineral royalties, gas-flaring penalties, import duty, rental gas-flaring fees, and other miscellaneous oil revenue.
The contrasting movements underline the changing composition of government revenue and the continued importance of non-oil sources, such as VAT, in supporting allocations to the three tiers of government.
For the Federal Government, states, and local governments, FAAC allocations remain an important source of funds for meeting monthly financial obligations, including salaries, infrastructure projects, and public service delivery.
The increase in VAT revenue in August provided some support to the distributable pool at a time when statutory revenue recorded a significant month-on-month decline.
The August allocation also gives state and local government authorities additional funds to finance their activities and obligations amid continuing pressure on public finances.
The FAAC meeting brought together representatives of the Federal Government, state governments, and local government councils to determine the amount of Federation Account revenue available for distribution for the month.
The latest allocation therefore reflects both the revenue generated by the Federation and the deductions, transfers, refunds, and savings made before the funds were shared among the beneficiaries.
