Statutory revenue and VAT form bulk of allocation as derivation funds go to oil-producing states; some key revenue sources decline from January…..
The Federation Account Allocation Committee (FAAC) has announced the allocation of N1.894 trillion as Federation Account revenue for February 2026 among the Federal Government, state governments, and local councils.
The disclosure came in a statement on Friday by Bawa Mokwa, following the March 2026 FAAC meeting held in Abuja.
The total distributable revenue comprised N1.274 trillion from statutory revenue and N619.119 billion from Value Added Tax (VAT).
How the Funds Were Shared
The communiqué indicated that the total revenue before deductions stood at N2.230 trillion. From this:
- 302 billion was deducted as the cost of revenue collection.
- 078 billion went toward transfers, refunds, and savings.
After deductions, the N1.894 trillion was distributed as follows:
- Federal Government:088 billion
- State Governments (collectively):525 billion
- Local Government Councils:467 billion
- Derivation Revenue to Oil-Producing States:949 billion (13% of mineral revenue)
Breakdown of Statutory Revenue
From the N1.274 trillion statutory component:
- Federal Government received 174 billion
- State Governments received 010 billion
- Local Government Councils received 776 billion
- Oil-producing states received 949 billion in derivation funds
From the N619.119 billion VAT revenue:
- Federal Government received 912 billion
- State Governments received 515 billion
- Local Government Councils received 692 billion
Revenue Trends
The FAAC report highlighted a decline in major revenue sources compared with January 2026:
- Gross statutory revenue fell to 561 trillion, down N395.138 billion from January’s N1.957 trillion
- Gross VAT revenue declined to 450 billion from N1.083 trillion in January
Other taxes, including Petroleum Profit Tax (PPT), Hydrocarbon Tax (HT), Companies Income Tax (CIT), Capital Gains Tax (CGT), and Stamp Duties (SDT), also saw decreases.
However, oil and gas royalties, excise duties, import duty, and the Common External Tariff (CET) recorded modest increases.
Why This Matters
FAAC allocations are a key source of funding for subnational governments, covering the Federal Government, 36 states, and 774 local councils.
Revenue sources for FAAC include oil earnings, taxes, customs duties, and VAT. Oil-producing states additionally benefit from a 13% derivation fund based on mineral revenue contributions.
These monthly allocations are critical for maintaining government operations at all tiers and ensuring that subnational administrations have the resources to deliver public services.
Over a recent three-month period (August–October 2025), cumulative FAAC disbursements totaled N9.62 trillion, reflecting the centrality of these allocations in Nigeria’s fiscal system.
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