Federal, state and local governments share N2.338tn from August revenue despite higher VAT collections….
The amount shared by Nigeria’s three tiers of government from the Federation Account dropped sharply in September, following a steep decline in statutory revenue generated during the previous month.
The Federal Government, 36 states and 774 local government councils received a combined N2.338 trillion at the September meeting of the Federation Account Allocation Committee, FAAC.
The latest payout represents a 22.2 percent decline from the N3.007 trillion distributed at the previous meeting, translating to a reduction of about N669 billion.
The N2.338 trillion allocation was based on revenue generated in August 2026, according to the Office of the Accountant-General of the Federation.
The decline came after statutory revenue, which accounts for a significant portion of funds available for distribution, fell substantially during the month.
Statutory revenue drops by N1.51tn
Gross statutory revenue fell to N2.850 trillion in August from N4.359 trillion in July, representing a decline of N1.508 trillion, or 34.6 percent.
The sharp contraction reversed the strong improvement recorded in July, when statutory revenue had climbed by N658.09 billion from N3.700 trillion in June to N4.359 trillion.
Despite the setback in statutory revenue, collections from Value Added Tax continued to move higher.
Gross VAT revenue increased by N40.875 billion during the month, rising from N793.968 billion in July to N834.843 billion in August. This represents a 5.1 percent increase.
How the N2.338tn was shared
A total of N3.685 trillion in gross revenue was available for the August distribution.
However, N125.142 billion was deducted as the cost of collection, while transfers, refunds and savings accounted for another N1.221 trillion.
The balance left for distribution was N2.338 trillion.
Of this amount, N1.565 trillion came from distributable statutory revenue, while N773.233 billion represented distributable VAT revenue.
The Federal Government received N804.897 billion from the total distributable funds, while the 36 states received N794.313 billion.
Local government councils received N555.142 billion.
In addition, N184.388 billion was paid to benefiting states as 13 percent derivation revenue from mineral resources.
Federal Government takes N804.9bn
A closer look at the statutory revenue component shows that the Federal Government received N727.573 billion from the N1.565 trillion distributed.
The states received N369.035 billion, while local governments got N284.511 billion.
The N184.388 billion derivation payment was distributed to eligible states.
For VAT, the Federal Government received N77.323 billion from the N773.233 billion available for distribution.
States received the largest share at N425.278 billion, while local governments received N270.632 billion.
Revenue performance remains mixed
The FAAC figures show that revenue performance was uneven across major sources during August.
Petroleum Profit Tax, Hydrocarbon Tax, VAT, Common External Tariff levies and excise duty recorded increases during the month.
However, the gains were offset by declines in several other revenue streams.
Companies Income Tax, Capital Gains Tax and Stamp Duties Tax fell, while petroleum royalties and mineral royalties also recorded lower collections.
Revenue from gas-flaring penalties, import duty, rental gas-flaring fees and miscellaneous oil revenue equally declined.
The latest distribution therefore marks a significant reversal from the record allocation recorded in the previous month, when N3.007 trillion was shared among the three tiers of government from July revenue.
The August figures underline the sensitivity of government finances to fluctuations in statutory revenue, even as stronger VAT collections continue to provide some support to the Federation Account.
