Nigeria’s Federal Government, 36 states and 774 local government councils shared N2.338 trillion from the Federation Account in August 2026 revenue, a 22.2 percent decline from the record N3.007 trillion distributed from July revenue.
The distribution was approved at the September meeting of the Federation Account Allocation Committee (FAAC) in Abuja. The Office of the Accountant-General of the Federation said the August allocation was lower by about N669 billion compared with the previous month.
The decline came mainly from a sharp fall in statutory revenue, although Value Added Tax collections increased during the month.
How the N2.338 trillion was shared
The total distributable amount consisted of N1.565 trillion in statutory revenue and N773.233 billion from Value Added Tax.
The Federal Government received N804.897 billion, while the 36 states collectively received N794.313 billion. Local government councils received N555.142 billion.
In addition, N184.388 billion was distributed to benefiting states as the constitutionally prescribed 13 percent derivation from mineral revenue.
The distribution illustrates the different revenue streams that make up the monthly Federation Account allocation.
| Recipient | Allocation |
|---|---|
| Federal Government | N804.897bn |
| State governments | N794.313bn |
| Local governments | N555.142bn |
| Mineral-revenue derivation | N184.388bn |
Statutory revenue drops sharply
The biggest change in the August figures was the decline in gross statutory revenue.
FAAC reported N2.850 trillion in gross statutory revenue for August, down from N4.359 trillion in July. That represents a reduction of about N1.508 trillion, or 34.6 percent month-on-month.
The fall reversed the sharp improvement recorded in July, when gross statutory revenue had increased from N3.700 trillion in June to N4.359 trillion.
The weaker statutory performance was reflected in the amount available for distribution, even though some individual revenue sources recorded increases.
VAT moves in the opposite direction
Value Added Tax provided a different picture.
Gross VAT revenue increased to N834.843 billion in August, compared with N793.968 billion in July. The N40.875 billion increase represents growth of about 5.1 percent.
Of the N773.233 billion in distributable VAT revenue, the Federal Government received N77.323 billion, states received N425.278 billion and local governments received N270.632 billion.
The figures show that VAT was relatively stronger in August even as statutory receipts weakened.
Government had N3.685 trillion in gross revenue
The N2.338 trillion shared by the three tiers was not the entire amount of gross revenue recorded during the month.
FAAC reported N3.685 trillion in gross revenue for August.
Before the remaining funds were distributed, N125.142 billion was deducted as the cost of collection, while N1.221 trillion was allocated to transfers, refunds and savings.
After those deductions and allocations, N2.338 trillion remained for distribution.
This distinction is important when interpreting FAAC figures. Gross revenue and distributable revenue are not the same amount.
Which revenue sources increased?
The FAAC communiqué reported mixed performance across the major revenue streams.
Petroleum Profit Tax, Hydrocarbon Tax, VAT, Common External Tariff levies and Excise Duty recorded significant increases during August.
At the same time, Companies Income Tax, Capital Gains Tax, Stamp Duties, petroleum royalties, mineral royalties, gas-flaring penalties, import duty, rental gas-flaring fees and miscellaneous oil revenue recorded declines.
The mixed performance helps explain why stronger VAT collections were not enough to offset the fall in statutory revenue.
August allocation follows a record July distribution
The latest FAAC figure needs to be viewed alongside the unusually high allocation recorded the previous month.
In August, FAAC distributed N3.007 trillion from July 2026 revenue, the largest monthly distribution recorded in 2026 and, according to PUNCH’s review, the highest in records going back to 2019.
The August distribution was therefore lower by about N669 billion.
A month-on-month decline does not by itself establish a long-term deterioration in government revenue. Monthly Federation Account receipts can fluctuate depending on oil-related revenue, taxes, customs collections and other sources.
The latest figures nevertheless demonstrate the volatility of government revenue available for sharing among the three tiers.
Why FAAC allocations matter to states and local governments
FAAC distributions are an important source of funding for Nigeria’s subnational governments.
The dependence is particularly significant for states with limited internally generated revenue. A recent analysis reported by PUNCH found that 26 states covered by a BudgIT report did not generate enough internal revenue in 2025 to cover personnel expenditure. The analysis found combined IGR of about N1.16 trillion against personnel spending of approximately N1.91 trillion for those states.
This means changes in monthly Federation Account allocations can affect the fiscal room available to governments for salaries, infrastructure, healthcare, education and other public services.
The size of the effect varies considerably from one state or local government to another because their internally generated revenue, expenditure commitments and other funding sources differ.
What the latest figures mean for Nigeria’s public finances
The August allocation presents a mixed fiscal picture.
On one side, VAT revenue continued to increase, and some tax and petroleum-related revenue categories recorded stronger collections.
On the other, gross statutory revenue fell by more than one-third from the previous month. That decline reduced the total amount available for distribution despite gross revenue of N3.685 trillion.
The figures also highlight why a single month of unusually high FAAC revenue should not automatically be treated as a permanent increase in government finances.
Nigeria’s public-sector revenue position will depend on how consistently tax collections perform, how oil and mineral revenues develop, how much revenue is retained after deductions and interventions, and how much money ultimately becomes available for distribution.
What to watch next
The next FAAC meetings will provide a clearer picture of whether the August decline was temporary or part of a broader change in revenue performance.
Particular attention is likely to remain on statutory revenue, VAT collections, petroleum-related receipts and the deductions made before distributable revenue is shared.
For state and local governments, the amount actually received will remain more important for near-term budgeting than the headline gross-revenue figure.
For now, the latest FAAC figures show that Nigeria’s three tiers of government received N2.338 trillion from August revenue, significantly below July’s record distribution but still supported by stronger VAT collections.
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