The Federation Account Allocation Committee has approved the sharing of 3.007 trillion naira generated in July among the federal government, the 36 states and the 774 local government areas.
The approval came at FAAC’s August meeting held in Owerri, Imo State, where members also reviewed the country’s fiscal outlook and discussed ways to strengthen revenue collection and public financial management. According to a statement from the Accountant General’s office, the federal government received 1.146 trillion naira, the states shared 943.352 billion naira and local governments received 673.649 billion naira. A further 243.478 billion naira in 13 percent derivation revenue went to mineral producing states.
Gross statutory revenue climbed to 4.359 trillion naira in July, up 658.087 billion naira, or 17.8 percent, from June, driven by stronger collections from petroleum profit tax, hydrocarbon tax, companies income tax, capital gains tax, stamp duty, royalties, excise duty and gas flaring penalties. Value added tax revenue held roughly steady at 793.968 billion naira, slipping 0.7 percent from June, with the overall statutory gains partly offset by declines in VAT, import duty, tariff levies and other oil related revenue lines.
The committee said it would keep working with revenue agencies to close collection gaps and improve remittance discipline, and reaffirmed its push for full and timely payment of collectible revenue into the federation account ahead of a planned reconciliation exercise. It also flagged solid minerals and other non oil royalties as areas of untapped potential as the country looks to diversify away from oil.
Held alongside the ongoing National Council on Federation and Economic Development, the meeting also included a session for state finance commissioners and accountants general on subnational fiscal health, with an emphasis on turning higher allocations into lasting development and social investment.
Officials noted that gross FAAC allocations have grown substantially over the past three years on the back of subsidy removal, exchange rate unification and tax reform, including the Nigeria Tax Act 2025, which took effect in January. Under the new law, states’ share of VAT revenue rose from 50 to 55 percent while the federal government’s share fell from 15 to 10 percent, and 30 percent of the states’ VAT pool is now allocated based on where goods and services are actually consumed rather than where a company is headquartered, tying revenue more closely to real economic activity within each state.
FAAC urged all tiers of government to focus on six markers of fiscal strength, including revenue quality, asset strength, economic growth, capital attraction, human capital and institutional transparency, and called for wider internally generated revenue, productive use of idle public assets, credible state level GDP data, investor friendly business environments and continued investment in education and health. On financial management, the committee asked governments to keep timely and audited public accounts, and called for complete asset registers, payroll verification and published audited accounts within the next twelve months.
