By Musa Ibrahim
Nigeria’s three tiers of government shared N31.46 trillion in gross Federation Account revenue between January and September 2026, exceeding the full-year collections recorded in 2021, 2022, 2023 and 2024.
A new report by Agora Policy, titled ‘10 Insights from FAAC Disbursements for January–September 2026’, shows that the Federation Account Allocation Committee (FAAC) generated N31.46 trillion during the nine-month period, compared with N28.74 trillion for the whole of 2024 and N35.81 trillion for 2025.
The figures highlight the growing revenue available to governments following major economic reforms, while raising questions about how effectively the additional resources are being converted into public services and productive investment.
The report recorded N24.25 trillion from statutory revenue, representing 77.1 percent of gross receipts, while value-added tax contributed N7.21 trillion, or 22.9 percent.
Compared with the N27.95 trillion generated during the corresponding period of 2025, revenue increased by N3.51 trillion, representing growth of 12.6 percent. Average monthly receipts stood at N3.50 trillion in the first nine months of 2026, against N2.98 trillion for the whole of 2025.
However, the pace of expansion is slowing. The N3.51 trillion increase recorded in the first nine months of 2026 was less than half the N8.97 trillion increase recorded during the corresponding period of 2024.
More revenue, tighter fiscal questions
The rise in revenue reflects the changing structure of government finances following the foreign exchange and petrol subsidy reforms introduced in 2023. Agora Policy noted that these reforms plausibly contributed to the sharp increase in naira-denominated receipts in 2024.
Tax reform implementation and higher oil prices associated with the conflict in Iran may also have supported revenue in 2026, although the report cautioned that aggregate figures alone cannot establish the contribution of each factor.
The distinction between nominal revenue growth and real fiscal capacity is important. The N31.46 trillion collected in nine months represents a substantial increase in naira terms, but the figures do not account for inflation or changes in the purchasing power of the currency.
Moreover, higher gross collections do not mean that the entire amount is available for immediate distribution or expenditure.
Deductions reached N11.10 trillion during the period, equivalent to approximately 35 percent of gross receipts. These covered savings, interventions, refunds, transfers and collection costs.
Consequently, total distributions, including a N450 billion augmentation, amounted to N20.81 trillion, comprising N20.36 trillion available before the augmentation.
The difference between gross receipts and distributable revenue underscores the importance of transparency around deductions and the resources ultimately reaching the three tiers of government.
How the money is shared
The Federal Government received approximately N7.35 trillion from distributions during the nine-month period, while state governments received N7.01 trillion and local governments obtained N4.92 trillion.
Oil-producing states received an additional N1.53 trillion under the 13 percent derivation principle, which allocates a share of oil revenue to the states from which the resources are extracted. This allocation is reported separately but also accrues to state governments.
These transfers provide governments with resources to finance salaries, infrastructure, healthcare, education and other public services.
A revenue windfall with limits
Agora Policy observed that cumulative revenue by September 2026 had reached approximately 88 percent of the N35.81 trillion collected throughout 2025.
The nine-month total was 240.8 percent above the full-year 2021 figure of N9.23 trillion, 154.5 percent above 2022’s N12.34 trillion, 93.2 percent above 2023’s N16.28 trillion and 9.5 percent above 2024’s N28.74 trillion.
If the current nine-month pace continued, annual gross revenue could reach approximately N41.95 trillion. The report stressed, however, that this is a simple annualisation rather than a forecast, because seasonal revenue peaks can influence monthly collections.
The N31.46 trillion collected by September represents a significant fiscal opportunity. Whether that opportunity improves living standards will depend on how effectively governments convert revenue into public value.
