The Federation Account Allocation Committee (FAAC) has shared a total of N2.03 trillion among the federal government, state governments, and local government councils for the month of March 2026. This was disclosed at the committee’s April meeting held in Abuja on Wednesday.
Details of the allocation were contained in a communique issued after the meeting. According to the committee, the distributable revenue came from three main sources: statutory revenue, value-added tax (VAT), and an augmentation fund. Statutory revenue contributed the largest share with N1.32 trillion, while VAT brought in N515.39 billion. An additional N200 billion was provided as augmentation to support the total distributable amount.
The total revenue available for the month stood at N2.36 trillion. However, before distribution, deductions were made. A sum of N81.084 billion was removed as the cost of collection, while N246.872 billion was set aside for transfers, refunds, and savings. These deductions reduced the final amount shared to N2.03 trillion.
A breakdown of the allocation shows that the federal government received N789.15 billion, state governments got N657.59 billion, and local government councils received N468.82 billion. In addition, oil-producing states received N120.75 billion as derivation revenue, representing 13 percent of mineral earnings.
Further details reveal how the statutory revenue of N1.32 trillion was shared. The federal government received N632.26 billion, states were allocated N320.69 billion, and local governments got N247.24 billion. The derivation fund of N120.75 billion was also drawn from this statutory revenue.
From the VAT pool of N515.39 billion, the federal government received N51.53 billion, states got N283.46 billion, and local governments received N180.38 billion. The remaining N200 billion augmentation fund was shared with the federal government receiving N105.36 billion, states getting N53.44 billion, and local governments receiving N41.20 billion.
While the overall revenue shared in March remains high, the committee noted a drop in VAT collections. Gross VAT revenue for the month stood at N664.43 billion, which is lower than the N668.45 billion recorded in February. This represents a decline of N4.03 billion.
The drop in VAT continues a trend that has raised concern among economic watchers. VAT is a key source of non-oil revenue for the country and plays an important role in funding government activities at all levels. A consistent decline in VAT collections may point to reduced economic activities, lower consumer spending, or challenges in tax collection.
Despite the decline in VAT, there were positive developments in other areas of revenue. The committee reported increases in collections from company income tax (CIT), capital gains tax (CGT), stamp duties, and excise duties. These increases helped to boost the overall revenue available for distribution in March.
Gross statutory revenue for the month rose to N1.69 trillion, showing an increase of N137.91 billion compared to the N1.56 trillion recorded in February. This growth suggests improved performance in some sectors of the economy, particularly those linked to corporate earnings and production.
The FAAC allocation remains a critical source of funding for all tiers of government in Nigeria. The monthly distribution supports the payment of salaries, execution of projects, and provision of basic services such as healthcare, education, and infrastructure.
For many state and local governments, FAAC allocations are the main source of income. Internally generated revenue (IGR) in several states remains low, making them heavily dependent on federal allocations. This dependence has often raised concerns about fiscal sustainability and the need for states to improve their revenue generation capacity.
The derivation fund, which benefits oil-producing states, is also a significant component of the allocation. The 13 percent derivation is provided to compensate these states for the environmental and economic impact of oil production. The N120.75 billion shared in March will go to states in the Niger Delta region, where oil exploration activities are concentrated.
At the same time, there are calls for more transparency and accountability in how the allocated funds are used. Citizens and civil society groups have repeatedly demanded that government at all levels should provide clear reports on spending and ensure that funds are used for development projects that benefit the people.
The March FAAC allocation comes at a time when Nigeria is facing economic challenges, including inflation, exchange rate pressures, and rising cost of living. These issues have put pressure on government finances and increased the need for efficient use of available resources.
The federal government has continued to emphasize the importance of diversifying the economy and reducing dependence on oil revenue. Efforts are being made to promote agriculture, manufacturing, and technology as alternative sources of income. However, progress in these areas has been gradual.
For now, FAAC allocations remain a lifeline for government operations across the country. The N2.03 trillion shared in March provides some relief, but concerns about declining VAT revenue and economic stability remain.
As the country moves forward, stakeholders are watching closely to see how revenue trends will evolve in the coming months. The performance of key revenue sources like VAT and company taxes will play a major role in shaping Nigeria’s fiscal outlook.