FAAC Remains Silent on January 2026 Revenue Distribution as Federal Income Continues Downward Trend
The Federation Accounts Allocation Committee (FAAC) has yet to announce the allocation of January 2026 revenue to federal, state, and local governments. This silence coincides with a persistent decline in federation revenue, now stretching into its fifth consecutive month, highlighting growing fiscal pressures and potential legal breaches.
Steady Revenue Decline and Allocation Disputes
Federal revenue has been on a consistent downward trajectory, dropping from N2.164 trillion in October 2025 to N1.736 trillion in November, N1.631 trillion in December, and further to N1.561 trillion in February 2026. During the January 2026 FAAC meeting, state finance commissioners rejected a proposed N1.969 trillion distribution for December 2025 revenue, deeming it insufficient based on expected accruals. Although this dispute was resolved by February 1, with December funds distributed, the committee has not released January allocation figures, despite expectations that the March meeting would address this issue.
Constitutional and Legal Implications
Section 162(3) of the 1999 Constitution mandates monthly distribution of federation account proceeds among government tiers, as set by the National Assembly. Failure to comply could constitute a breach of the constitution and the Fiscal Responsibility Act, jeopardizing the fiscal stability of states and local governments. When questioned about the January revenue, Bawa Mokwa, Director of Press and Public Relations at the Office of the Accountant-General of the Federation, stated, "We are working on it," offering no further clarification.
Recent Developments in Oil Revenue and VAT Performance
In a positive shift, FAAC received 100% of profit from oil production sharing contracts (PSCs) from the Nigerian National Petroleum Company (NNPC) Limited in February 2026. This follows Presidential Executive Order 9, signed on February 13, 2026, which mandates direct payment of all oil and gas revenues into the Federation Account, replacing previous practices that allowed NNPC to retain portions for expenses. However, the March FAAC communiqué revealed a significant drop in value-added tax (VAT) revenue, falling to N668.45 billion in February 2026 from N1.083 trillion in January and N913.957 billion in December 2025, underscoring broader revenue challenges.
The ongoing silence on January allocations, coupled with sustained revenue declines, raises critical questions about transparency and adherence to fiscal laws, potentially impacting government operations and public services nationwide.
