The Federation Account Allocation Committee (FAAC) has distributed a total of N2.3 trillion among the Federal Government, state governments and local government councils as revenue allocation for May 2026, reflecting another significant increase in federally collected revenue available for national development and public service delivery.
The revenue sharing was approved during the June 2026 meeting of the Federation Account Allocation Committee held in Abuja. Details of the allocation were disclosed in a statement issued by the Director of Press and Public Relations in the Office of the Auditor-General of the Federation, Bawa Mokwa.
According to the committee, the N2.3 trillion distributable revenue was derived from two major sources: N1.611 trillion in statutory revenue and N688.785 billion generated from Value Added Tax (VAT). The allocation represents one of the largest monthly revenue distributions in recent years and highlights the importance of federally collected revenue in funding government operations at all levels.
FAAC reported that a total gross revenue of N3.395 trillion was available during the month under review. However, before the final distribution, deductions were made to cover statutory obligations. These included N123.546 billion for the cost of revenue collection and N971.610 billion for transfers, interventions, refunds and other approved expenditures.
The committee noted a significant increase in statutory revenue performance during the month. Gross statutory revenue rose to N2.651 trillion in May 2026 compared to N2.378 trillion recorded in April, representing an increase of N273.623 billion. Analysts attribute the improvement to stronger earnings from key revenue-generating sectors, including oil and gas receipts, taxes and other federally collected revenues.
In contrast, Value Added Tax revenue experienced a decline during the same period. Gross VAT collections stood at N743.668 billion in May, down from N806.617 billion recorded in April, indicating a decrease of N62.949 billion. Economic observers say fluctuations in consumer spending, business activities and tax remittances may have contributed to the reduction.
From the total distributable revenue of N2.3 trillion, the Federal Government received N818.680 billion to support national programmes, infrastructure projects, debt obligations and recurrent expenditures.
State governments collectively received N759.141 billion, providing critical financial support for education, healthcare, security, agriculture, infrastructure development and other state-level responsibilities.
The 774 local government councils across the country received N534.277 billion. The allocation is expected to strengthen grassroots development efforts, improve local service delivery and support community-based projects in rural and urban areas.
In addition, oil-producing states benefited from the constitutional derivation principle, receiving N188.132 billion representing 13 percent of mineral revenue generated from their territories. The derivation fund is intended to compensate resource-producing states and support development in communities impacted by oil and mineral exploration activities.
A breakdown of the statutory revenue allocation shows that from the N1.611 trillion distributable statutory revenue, the Federal Government received N749.801 billion, while state governments received N380.309 billion. Local government councils were allocated N293.202 billion, while oil-producing states shared the N188.132 billion derivation revenue.
Economic experts note that the sustained increase in FAAC allocations provides governments at all levels with additional fiscal space to execute projects and improve public services. However, they also emphasize that increased revenue must be matched with transparency, accountability and prudent management to ensure citizens benefit directly from the resources.
The latest allocation comes at a time when many states and local governments are facing rising demands for infrastructure development, social welfare programmes, healthcare services and security interventions. Increased allocations are therefore expected to provide some relief and enable sub-national governments to address pressing developmental challenges.
Observers have also stressed the importance of diversifying government revenue sources beyond oil earnings and VAT collections. While current revenue figures remain strong, experts warn that long-term fiscal sustainability depends on expanding non-oil exports, strengthening tax administration and promoting private-sector growth.
As governments across the federation receive their shares of the May 2026 revenue, attention is expected to focus on how effectively the funds are utilised to improve living standards, stimulate economic growth and deliver critical services to Nigerians.
The latest FAAC distribution underscores the central role of revenue sharing in Nigeria’s fiscal system and highlights the continued importance of prudent economic management in achieving sustainable national development.
