The Federal Government, 36 state governments and 774 local government councils have shared a total sum of ₦1.969 trillion as revenue for the month of December 2025.
The sharing was done under the Federation Account Allocation Committee (FAAC) at its January 2026 meeting. Details of the allocation were contained in a communiqué issued after the meeting and made available to journalists on Monday.
The communiqué was signed by the Director of Press and Public Relations in the Office of the Accountant-General of the Federation, Mr Bawa Mokwa.
According to the communiqué, the ₦1.969 trillion shared among the three tiers of government was made up of statutory revenue, Value Added Tax (VAT) revenue and Electronic Money Transfer Levy (EMTL) revenue.
It stated that the total distributable revenue included ₦1.084 trillion from statutory revenue, ₦846.507 billion from VAT and ₦38.110 billion from EMTL.
The committee disclosed that the total gross revenue available for the month of December 2025 stood at ₦2.585 trillion. From this amount, deductions were made for cost of collection, transfers, refunds and savings before the final amount was shared.
“Total deduction for cost of collection was ₦104.697 billion, while total transfers, refunds and savings amounted to ₦511.585 billion,” the communiqué said.
After these deductions, the remaining ₦1.969 trillion was distributed among the Federal Government, state governments and local government councils in line with the revenue sharing formula approved by law.
A breakdown of the allocation showed that the Federal Government received ₦653.500 billion from the total distributable revenue. The 36 state governments received ₦706.469 billion, while the 774 local government councils received ₦513.272 billion.
In addition, oil-producing states received a total of ₦96.083 billion as derivation revenue. This amount represents 13 per cent of mineral revenue, which is shared among states that produce oil and gas, as provided for in the Nigerian Constitution.
The FAAC communiqué also gave details of how revenue from different sources was shared.
From the ₦1.084 trillion distributable statutory revenue, the Federal Government received ₦520.807 billion. The state governments got ₦264.160 billion, while the local governments received ₦203.656 billion. The oil-producing states again received ₦96.083 billion as derivation revenue from this component.
Statutory revenue mainly comes from oil and gas earnings, companies income tax, customs duties and other federally collected revenues. It remains one of the major sources of income for all tiers of government in Nigeria.
However, the communiqué revealed that gross statutory revenue for December 2025 was ₦1.631 trillion. This was lower than the ₦1.736 trillion recorded in November 2025, showing a drop of ₦105.202 billion.
This decline suggests that earnings from some key revenue sources, especially oil-related income, were lower in December compared to the previous month.
On the other hand, revenue from Value Added Tax showed a strong improvement. According to the FAAC communiqué, gross VAT revenue for December 2025 stood at ₦913.957 billion.
This was significantly higher than the ₦563.042 billion recorded in November 2025, representing an increase of ₦350.915 billion. The increase in VAT revenue points to higher consumer spending, improved tax collection or the impact of recent tax and price adjustments in the economy.
From the ₦846.507 billion distributable VAT revenue, the Federal Government received ₦126.976 billion. The state governments received ₦423.254 billion, while the local governments received ₦296.277 billion.
VAT is an important source of revenue for states and local governments because a larger share of the proceeds is allocated to them. Many states rely heavily on VAT allocations to pay salaries, fund basic services and support local projects.
The communiqué also disclosed how revenue from the Electronic Money Transfer Levy was shared. EMTL is a levy charged on certain electronic financial transactions and has become a growing source of government revenue due to the increased use of digital banking.
From the ₦38.110 billion collected as EMTL in December 2025, the Federal Government received ₦5.717 billion. The state governments got ₦19.055 billion, while the local governments received ₦13.338 billion.
FAAC also provided insights into the performance of major revenue sources during the month under review. It noted that Companies Income Tax, Import Duty and VAT recorded significant increases in December 2025.
This improvement may be linked to better tax administration, increased business activities during the festive period, and higher import volumes ahead of the end-of-year celebrations.
The committee also reported that Oil and Gas Royalty, CET levies and fees increased slightly during the month. However, some key revenue items performed poorly.
According to the communiqué, Excise Duty, Petroleum Profit Tax and EMTL recorded considerable decreases compared to the previous month. This reflects ongoing challenges in the oil and gas sector, including production issues, price fluctuations and operational costs.
The monthly FAAC allocation is critical to the functioning of government at all levels in Nigeria. The Federal Government depends on its share to fund national projects, security, debt servicing and social programmes.
State governments rely on FAAC allocations to complement their internally generated revenue, especially as many states struggle to raise enough funds locally. For local government councils, FAAC remains the main source of income used to pay salaries and provide basic services at the grassroots.
In recent years, rising inflation, fuel subsidy reforms and exchange rate changes have increased pressure on government finances. As a result, FAAC allocations are closely watched by public officials, workers and citizens alike.
The December 2025 allocation comes at a time when governments across the country are preparing budgets, paying year-end obligations and planning for the new fiscal year.