The Federation Account Allocation Committee (FAAC) has distributed a total of N2.55 trillion to the federal, state, and local governments for the month of June 2026. This allocation follows a significant increase in gross revenue, which rose by 32.6% to N4.5 trillion, according to the latest communiqué issued after the FAAC meeting chaired by the Minister of Finance and Coordinating Minister of the Economy.
Breakdown of the Revenue Distribution
Of the N2.55 trillion distributed, the federal government received N1.02 trillion, state governments got N810 billion, and local government councils received N600 billion. The remaining N120 billion was shared among the nine oil-producing states as derivation revenue. The distribution was based on the revenue generated in June, which included statutory allocations, Value Added Tax (VAT), and other levies.
The communiqué revealed that the gross revenue available from the Federation Account for June was N4.5 trillion, a substantial increase from the N3.4 trillion recorded in May. This 32.6% rise was attributed to improved oil production and higher crude oil prices, as well as increased non-oil revenues such as corporate taxes and customs duties.
Statutory and VAT Allocations
From the total distributable revenue, statutory allocations accounted for N1.8 trillion, while VAT contributed N750 billion. The remaining N450 billion came from other sources, including electronic money transfer levies and exchange rate gains. The FAAC communiqué stated that the increase in VAT collections was driven by improved compliance and economic activity.
According to the communiqué, “The committee noted the significant improvement in revenue generation across all streams and urged all revenue-generating agencies to sustain the momentum.” The minister also commended the efforts of the Nigeria Customs Service, the Federal Inland Revenue Service (FIRS), and the Nigerian National Petroleum Corporation (NNPC) for their contributions to the revenue growth.
Impact on States and Local Governments
The increased allocation is expected to provide fiscal relief to state and local governments, many of which have been grappling with budget shortfalls due to rising debt servicing costs and infrastructure needs. The N810 billion allocated to states represents a 28% increase from the N633 billion distributed in May. Similarly, local governments received N600 billion, up from N468 billion in the previous month.
Economic analysts have welcomed the development, noting that improved revenue sharing could enhance public spending on critical sectors such as education, healthcare, and infrastructure. However, some experts caution that the reliance on oil revenues remains a vulnerability, given the volatility of global crude prices.
Outlook for the Coming Months
The FAAC meeting also discussed the outlook for the remainder of the year, with expectations that revenue performance will remain robust if oil production targets are met and non-oil revenue streams continue to grow. The committee reiterated its commitment to transparency and accountability in the sharing of federation revenues.
