FAAC Distributes ₦1.894 Trillion February Revenue to Federal, State, and Local Governments
FG, States, LGs Receive ₦1.894 Trillion as FAAC Shares February Revenue
Nigeria’s Federation Account Allocation Committee (FAAC) has shared a total of ₦1.894 trillion as revenue for February 2026 among the Federal Government, state governments, and local government councils.
According to details published by Nairametrics, the revenue allocation was finalised during the March 2026 FAAC meeting in Abuja and represents funds generated from statutory revenue, Value Added Tax (VAT), and other federally collected sources.
The disbursement underscores the continued reliance of Nigeria’s three tiers of government on centrally collected revenues, particularly as fluctuations in oil-related income and tax receipts continue to shape fiscal outcomes.
Breakdown of FAAC revenue allocation
The ₦1.894 trillion distributable revenue was allocated across the three tiers of government based on the statutory sharing formula.
The Federal Government received ₦675.088 billion, representing the largest share of the allocation.
State governments collectively received ₦651.525 billion, while local government councils were allocated ₦456.467 billion.
In addition, ₦110.949 billion was distributed as 13 percent derivation revenue to oil-producing states, reflecting constitutional provisions that grant oil-producing regions a share of revenue generated from natural resources within their jurisdictions.
The FAAC distribution remains a critical fiscal lifeline for many states and local governments, several of which rely heavily on monthly federal allocations to fund salaries, infrastructure development, and social services.
Revenue sources contributing to the allocation
The total distributable amount consisted of revenues from two major streams:
Statutory revenue: ₦1.274 trillion
Value Added Tax (VAT): ₦619.119 billion
Statutory revenue includes income from oil and gas royalties, petroleum taxes, customs duties, and company income taxes collected by federal agencies.
However, before the final distribution, deductions were made from the gross revenue pool. The committee approved ₦77.302 billion as the cost of collection, covering administrative expenses incurred by revenue-generating agencies.
Additionally, ₦259.078 billion was allocated to transfers, interventions, refunds, and savings, in accordance with fiscal arrangements within the federation.
Decline in revenue compared with January
The February allocation reflects a decline in revenue compared with January 2026, highlighting ongoing volatility in Nigeria’s revenue streams.
Gross statutory revenue dropped from ₦1.957 trillion in January to ₦1.561 trillion in February, while VAT revenue fell sharply from ₦1.083 trillion to ₦668.450 billion during the same period.
The FAAC report indicated that several tax components experienced declines, including:
Petroleum Profit Tax (PPT)
Hydrocarbon Tax
Companies Income Tax (CIT)
Capital Gains Tax
Value Added Tax (VAT)
Despite these reductions, some revenue categories recorded growth. Oil and gas royalties and excise duties increased during the reporting period, partially offsetting the broader decline in tax inflows.
Fiscal implications for government spending
Monthly FAAC allocations remain central to Nigeria’s fiscal structure. Many subnational governments depend on these transfers to finance recurrent expenditure and development programmes.
Fluctuations in federally collected revenues therefore have immediate implications for public finances across the federation. A decline in statutory revenue or VAT receipts can affect budget execution at the state and local government levels, particularly in regions with limited internally generated revenue.
Fiscal analysts continue to emphasise the importance of diversifying government revenue sources and strengthening domestic tax systems to reduce reliance on oil-linked earnings and volatile federal transfers.
Outlook
The February FAAC allocation illustrates both the scale of federal revenue distribution and the challenges associated with revenue volatility. While nearly ₦1.9 trillion was shared across the federation, declining tax receipts highlight structural vulnerabilities within Nigeria’s public finance system.
As the government pursues fiscal reforms and economic diversification, improving tax collection efficiency and expanding non-oil revenue sources will remain critical to ensuring stable and sustainable revenue flows for all tiers of government.
