FAAC: FG, States, LGs Share N3.007tn in July, Revenue Jumps 17.8%
The Federal Government, 36 states and 774 local government councils shared a total of N3.007 trillion in federation revenue for July 2026, following a significant increase in statutory collections.
The disbursement was approved at the August 2026 meeting of the Federation Account Allocation Committee (FAAC), held in Owerri, Imo State.
According to a statement issued on Tuesday by the Director of Press and Public Relations, Office of the Accountant-General of the Federation, Bawa Mokwa, gross statutory revenue increased to N4.359 trillion in July, from N3.700 trillion recorded in June.
The increase of N658.087 billion, representing 17.8 per cent, was attributed to improved collections from petroleum and non-oil revenue sources.
The statement said, “In its regular monthly business, FAAC approved the disbursement of a total of N3.007tn to the Federal Government, the 36 State Governments and the 774 Local Government Councils as revenue for July 2026.”
It added that the July figures indicated a strengthening of the federation’s underlying revenue base, with improved collection performance across oil and non-oil statutory sources.
However, gross Value Added Tax (VAT) revenue declined marginally to N793.968 billion in July from N799.746 billion in June, representing a decrease of N5.778 billion, or 0.7 per cent.
The communiqué showed that Petroleum Profit Tax, Hydrocarbon Tax, Companies Income Tax, Capital Gains Tax, Stamp Duty, petroleum royalties, mineral royalties, excise duty and gas-flaring penalties recorded increases during the month.
The gains were partly offset by declines in VAT, import duty, Common External Tariff levies, gas-flaring fee rentals and miscellaneous oil revenue.
Mokwa said the committee would continue to work with revenue-generating agencies to close collection gaps and strengthen remittance discipline.
The latest revenue increase comes amid ongoing fiscal reforms, including the removal of the petrol subsidy, foreign exchange reforms and efforts to broaden Nigeria’s tax base.
Beyond the monthly allocation, the FAAC meeting focused on the need for the three tiers of government to translate higher federation revenues into sustainable economic growth, improved infrastructure and better social services.
The meeting, held on the sidelines of the National Council of Federation and Economic Development, brought together finance commissioners and accountants-general to deliberate on the fiscal health of the federation and strategies for converting increased revenues into long-term economic gains.
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The committee identified six key areas requiring attention: improving internally generated revenue, strengthening and commercialising public assets, expanding economic activities, attracting private capital, investing in human capital and enhancing transparency in public finance.
States were also encouraged to use the period of increased revenue to develop comprehensive asset registers, verify payrolls and ensure the timely publication of audited financial statements.
The FAAC noted that federation revenues had risen significantly over the past three years, driven largely by subsidy removal, exchange-rate reforms and tax reforms.
It further highlighted changes introduced by the Nigeria Tax Act 2025, which took effect on January 1, 2026, particularly the revised distribution framework for VAT revenue.
Under the new arrangement, the states’ share of VAT revenue increased from 50 per cent to 55 per cent, while the Federal Government’s share declined from 15 per cent to 10 per cent.
The framework also provides that 30 per cent of the states’ VAT pool should be distributed according to the place of consumption rather than the location of a company’s registered headquarters.
The adjustment is expected to strengthen the link between economic activity in individual states and their VAT receipts, potentially encouraging subnational governments to attract businesses, stimulate consumption and expand their economic bases.
The committee also reaffirmed its commitment to the full and timely remittance of collectible revenues by Ministries, Departments and Agencies into the Federation Account.
It stressed the importance of diversifying government revenue beyond crude oil, noting that solid minerals and other non-oil royalty streams would remain key areas of focus in efforts to build a more resilient federation revenue base.
The FAAC cautioned that sustaining the strong statutory revenue recorded in July would depend on continued improvements in collection and remittance by revenue-generating agencies.
It said the central challenge for governments was no longer simply to share rising revenues, but to convert the additional resources into productive investments capable of strengthening public finances and improving citizens’ living conditions.
The committee therefore urged the Federal Government and state governments to use the current period of increased revenue to institutionalise fiscal reforms, improve the predictability of allocations and establish stronger foundations for sustainable economic development.
It said sustaining the July revenue gains would require continued discipline in revenue collection and remittance across government agencies, while supporting reforms aimed at improving the growth and predictability of allocations to all three tiers of government.
By PRNigeria
