By Majeed Salaam
Nigeria’s three tiers of government shared N2.338 trillion in August 2026 revenue, a 22.2 percent decline from the record N3.007 trillion distributed in July, as a steep fall in statutory revenue outweighed stronger Value Added Tax (VAT) collections.
The latest distribution was approved at the September meeting of the Federation Account Allocation Committee (FAAC) in Abuja and represents revenue generated in August. The Office of the Accountant-General of the Federation (OAGF) confirmed that the amount distributed was N669 billion below the previous month’s allocation.
The reversal is significant because July had produced the highest monthly FAAC distribution recorded in 2026. The N3.007 trillion shared in August from July revenue followed a N658.09 billion increase in gross statutory revenue, which had risen from N3.700 trillion in June to N4.359 trillion in July.
In August, however, gross statutory revenue fell by N1.508 trillion, or 34.6 percent, to N2.850 trillion.
“A total sum of N2.338tn, being August 2026 Federation Account Revenue, has been shared to the Federal Government (FG), States and the Local Government Councils,” said Bawa Mokwa, Director of Press and Public Relations at the OAGF.
The decline points to the continued sensitivity of public revenue to fluctuations in statutory collections, particularly revenue streams linked to petroleum and other taxable economic activities.
The composition of August revenue, however, was not uniformly weak. VAT continued its upward movement, providing one of the few areas of strength during the month. Gross VAT collections increased by N40.875 billion to N834.843 billion, up 5.1 percent from N793.968 billion in July.
That increase is notable because VAT has become an increasingly important component of the revenue shared among the three levels of government. States alone received N425.278 billion from the N773.233 billion distributable VAT pool in August, while local governments received N270.632 billion and the FG received N77.323 billion.
Overall, N3.685 trillion in gross revenue was available for the month. After N125.142 billion was deducted as the cost of collection and N1.221 trillion was accounted for through transfers, refunds and savings, N2.338 trillion remained for distribution.
The distributable amount comprised N1.565 trillion in statutory revenue and N773.233 billion in VAT.
The FG received N804.897 billion from the combined distribution, while the 36 states received N794.313 billion. The 774 local government councils received N555.142 billion. In addition, N184.388 billion was distributed to benefiting states as 13 per cent derivation revenue from mineral resources.
The statutory revenue component showed a different distribution pattern. Of the N1.565 trillion available, the FG received N727.573 billion, states received N369.035 billion and local governments received N284.511 billion, alongside the N184.388 billion derivation payment.
The revenue data also reveals an uneven performance across individual tax and petroleum-related sources. Petroleum Profit Tax, Hydrocarbon Tax, VAT, Common External Tariff levies and excise duty recorded increases in August. Companies Income Tax (CIT), Capital Gains Tax (CGT), Stamp Duties Tax, petroleum royalties, mineral royalties, gas-flared penalties, import duty, rental gas-flared fees and miscellaneous oil revenue, however, declined.
For state and local governments, the latest figures reinforce the importance of maintaining revenue buffers as monthly FAAC inflows fluctuate. The contrast between July and August also shows why a single month of exceptionally high federation revenue may not provide a reliable basis for projecting subsequent allocations.
The latest distribution further places VAT in a stronger position within the federation revenue mix. Its August increase came even as statutory revenue suffered a substantial contraction, providing some offset but not enough to prevent the overall allocation from falling sharply.
The OAGF maintains FAAC reports as part of its public financial reporting, although its currently indexed 2026 publication page lists reports through June.
The August figures therefore present a mixed fiscal picture: a sharp contraction in the revenue pool available for sharing, continued dependence on volatile statutory revenue, and a comparatively stronger VAT stream. For governments planning expenditure around FAAC receipts, the immediate issue is not only the size of the latest allocation but the sustainability and composition of the revenue supporting it.
