The Digest:
The Federation Account Allocation Committee (FAAC) disbursed ₦1.969 trillion in revenue accrued in December 2025 to the three tiers of government at its January 2026 meeting. The distributable revenue comprised ₦1.084 trillion in statutory revenue, ₦846.5 billion from Value Added Tax (VAT), and ₦38.1 billion from the Electronic Money Transfer Levy (EMTL). From the total, the Federal Government received ₦653.5 billion, state governments got ₦706.5 billion, and local government councils were allocated ₦513.3 billion, with an additional ₦96.1 billion shared as 13% derivation to oil-producing states.
Key Points:
- The allocation provides crucial liquidity for state and local governments to meet salary obligations, fund infrastructure, and deliver services.
- The significant VAT share highlights its growing importance as a major non-oil revenue stream for sub-national governments.
- The increase from November’s shared revenue indicates a positive, albeit fluctuating, trend in national revenue collection.
- The distribution formula directly impacts the fiscal capacity and autonomy of states, influencing their developmental priorities.
- Recurrent reliance on monthly FAAC allocations underscores the continued need for deeper internal revenue generation at the state level.
Sources: Business Post, Business Day
