FAAC Shares Record N2.55trn as June Revenues Soar

The Federation Account Allocation Committee distributed an unprecedented 2.550 trillion Naira to Nigeria’s three tiers of government following a substantial surge in tax and oil receipts. The distribution represents a 10.9 per cent increase from the 2.300 trillion Naira shared in the preceding month. This fiscal windfall provides a temporary cushion for cash-strapped state governors struggling to meet rising administrative costs. Bawa Mokwa, the Director of Press and Public Relations at the Office of the Accountant-General of the Federation, confirmed the figures in Abuja on Wednesday. The federal government walked away with the lion’s share of the cash pool.

A massive jump in gross statutory revenue drove the windfall during the month under review. Statutory earnings climbed to 3.700 trillion Naira in June, leaping by 1.049 trillion Naira from the 2.651 trillion Naira generated in May. The committee attributed the stronger performance to robust receipts from corporate income taxes, import duties, and petroleum royalties. Conversely, traditional fiscal anchors such as the Petroleum Profit Tax and the Hydrocarbon Tax experienced notable declines. This shift highlights a growing state reliance on aggressive non-oil taxation to fill public coffers.

The total distributable cash pool comprised 1.809 trillion Naira in statutory revenue and 740.724 billion Naira from Value Added Tax. From the total collection, the federal government received 923.438 billion Naira. The 36 state governments shared 838.208 billion Naira, while the 774 local government councils took home 591.390 billion Naira. Oil-producing states also split an extra 197.610 billion Naira under the 13 per cent derivation formula. These allocations represent the highest nominal payouts to the federating units this year.

Gross earnings across all revenue channels actually reached 4.500 trillion Naira before statutory deductions thinned the final pot. Technical agencies removed 160.744 billion Naira as the standard cost of revenue collection. Another 1.789 trillion Naira left the ledger immediately for mandatory national transfers, interventions, and financial refunds. Value Added Tax collections also showed positive momentum, growing by 56.078 billion Naira to clear 799.746 billion Naira in June. The consumption tax remains a highly reliable revenue driver for the sub-national governments.

A breakdown of the domestic tax structure reveals that state governments remain heavily dependent on consumer spending to fund their local budgets. Out of the 740.724 billion Naira shared from Value Added Tax, state authorities claimed 407.398 billion Naira. The local government councils received 259.253 billion Naira, leaving the federal administration with a small slice of 74.072 billion Naira. This distribution model ensures that local administrations receive a steady injection of operational cash regardless of international oil price volatility.

While the record-breaking numbers look excellent on paper, local economists warn that nominal revenue growth means little in the face of currency devaluation. High inflation continues to erode the purchasing power of these multi-billion-naira allocations. State governors face immense public pressure to use these extra funds to implement the newly approved minimum wage. The sudden influx of cash into the financial system could also complicate the central bank’s ongoing battle against excess liquidity. The government is collecting more paper money, but it is buying fewer real solutions.