Nigeria's FAAC Revenue Hits N18.72tn in First Half of 2026

A recent report by Agora Policy has revealed that the Federation Account Allocation Committee (FAAC) generated a total of N18.72 trillion in revenue for the first half of 2026. This amount was shared among the three tiers of government, with the federal government receiving N4.57 trillion, the 36 states sharing N4.47 trillion, and the 774 local government councils receiving N3.13 trillion. The remaining N6.13 trillion, which accounts for 33% of the total revenue, was deducted for various purposes such as savings, interventions, refunds, transfers, and collection costs.

The report further showed that Lagos State was the largest recipient of FAAC allocations, receiving a total of N477.05 billion, while Nasarawa State received the least with N72.78 billion. It was also observed that statutory revenue was the primary source of FAAC receipts, contributing N13.95 trillion, which is equivalent to 75% of the total gross revenue. Value Added Tax (VAT) accounted for N4.77 trillion, representing 25% of the total revenue.

The total distributable revenue for the first half of 2026 was N12.59 trillion, which represents a 24.4% increase from the N10.12 trillion recorded in the first half of 2025. The federal government's share of the revenue increased, and it received the largest portion of the distributable revenue. The report also noted that the distribution of Gross FAAC revenue shifted in favor of the federal government in the first half of 2026, with the federal government receiving a larger share than the states.

A breakdown of the N6.13 trillion deducted from the FAAC revenue showed that savings and interventions accounted for the largest share, with N2.30 trillion and N2.14 trillion, respectively. Refunds totaled N714.51 billion, while the cost of collection stood at N665.48 billion. Transfers accounted for the smallest deduction, with N311.84 billion. The report also highlighted a significant increase in gross FAAC revenue over the past five years, with a 323% increase from N4.43 trillion in the first half of 2021 to N18.72 trillion in the first half of 2026.

According to Agora Policy, 'If this trend of revenue performance continues in the second half of the year, the gross FAAC revenue for 2026 may exceed that of 2025.' The report also noted a sharp decline in refunds, which fell by 80% compared to the corresponding period in 2025. Savings from Gross FAAC revenue increased substantially by 151% and became the largest component of FAAC deductions in the first half of 2026, accounting for 37% of total deductions.

The breakdown of allocations to interventions in the first half of 2026 included the National Security Fund (N1 trillion), Infrastructure Development Fund for States (N777 billion), Military Intervention Fund (N250 billion), and Intervention for State Security (N108 billion). June recorded the highest Gross FAAC revenue in the first half of 2026, at N4.50 trillion, likely driven by higher Company Income Tax (CIT) collections and other annual tax remittances typically due in June.

In terms of year-on-year growth, Lagos and Oyo states recorded the largest increases in Gross FAAC allocations, at 41.5%. The report provides insights into the revenue generated by FAAC and its distribution among the three tiers of government, highlighting the trends and changes in revenue allocation over the years.