A sharp fall in statutory revenue led to a significant drop in allocations to the three tiers of government, with the Federal Government, states and local government councils sharing ₦2.338 trillion from the Federation Account in September.
The figure, which relates to revenue generated in August 2026, was 22.2 per cent lower than the record ₦3.007 trillion distributed a month earlier, representing a decline of ₦669 billion.
The August allocation reversed the gains recorded in the previous month, when July’s revenue produced the highest monthly FAAC distribution of 2026 and the largest in records reviewed back to 2019. The Office of the Accountant-General of the Federation said: “A total sum of N2.338tn, being August 2026 Federation Account Revenue, has been shared to the Federal Government, States and the Local Government Councils.”
According to the FAAC communiqué, the decline was driven largely by a steep reduction in statutory revenue. Gross statutory receipts for August stood at ₦2.850 trillion, down by ₦1.508 trillion from ₦4.359 trillion in July. The OAGF noted that “Gross statutory revenue of N2.850tn was received for the month of August 2026”, compared with ₦4.359 trillion in the preceding month. This marked a reversal from July, when gross statutory revenue had increased by ₦658.09 billion from ₦3.700 trillion in June.
Value Added Tax collections, however, continued their upward trajectory. Gross VAT revenue rose by ₦40.88 billion, or 5.1 per cent, to ₦834.843 billion in August from ₦793.968 billion in July. The communiqué stated that “Gross revenue of N834.843bn was available from the Value Added Tax in August 2026.”
Overall, gross revenue available in August amounted to ₦3.685 trillion. Deductions included ₦125.142 billion for collection costs and ₦1.221 trillion for transfers, refunds and savings, leaving ₦2.338 trillion available for distribution. The distributable sum comprised ₦1.565 trillion in statutory revenue and ₦773.233 billion from VAT.
Of the total allocation, the Federal Government received ₦804.897 billion, while the 36 states were allocated ₦794.313 billion. The 774 local government councils received ₦555.142 billion, and ₦184.388 billion was paid to eligible states as derivation revenue, representing 13 per cent of mineral earnings.
From the ₦1.565 trillion distributable statutory revenue, the Federal Government received ₦727.573 billion, states received ₦369.035 billion and local councils got ₦284.511 billion. The derivation allocation of ₦184.388 billion was also paid from this revenue stream.
Under the ₦773.233 billion distributable VAT revenue, the Federal Government received ₦77.323 billion, states took ₦425.278 billion, while local governments received ₦270.632 billion.
The communiqué showed mixed results across major revenue sources during the month. Petroleum Profit Tax, Hydrocarbon Tax, VAT, Common External Tariff levies and excise duties recorded notable increases. In contrast, Companies Income Tax, Capital Gains Tax, Stamp Duties Tax, petroleum and mineral royalties, gas-flare penalties, import duties, rental gas-flare fees and other oil-related revenues posted considerable declines.