…Charts Fiscal Efficiency Roadmap For Nigeria’s Growth
The Federation Account Allocation Committee (FAAC) held its August 2026 meeting in Owerri, Imo State, during which it approved the disbursement of a total of N3.007 trillion to the federal, state governments and the local governments from the revenue that accrued to the federation account in the month.
The Director, (Press and Public Relations) of the Office of the Accountant-General of the Federation (OAGF), Bawa Mokwa, in a statement indicated that the disbursements to the three tiers of government was made during the ongoing National Council of Federation and Economic Development (NACOFED) programme.
The Director disclosed that beyond approving the sharing of July 2026 revenue, the meeting was used to chart a path for states to convert Nigeria’s recent revenue growth into lasting fiscal strength during a retreat session for Commissioners of Finance and Accountant-General on subnational fiscal fitness.
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According to the statement, the Federal Government received total sum of N1.146 trillion, the State Governments shared N943.352 billion compared to the local government’s N673.649 billion while N243.478 billion (13% of mineral revenue) was shared to the benefiting states as derivation revenue.
The communique issued at the end of the FAAC’s meeting reflected that the month’s revenue collections significantly improved as Gross statutory revenue rose to N4.359 trillion in July 2026, up by N658.087 billion and representing 17.8% increase from N3.700 trillion in June 2026.
The communiqué attributed the month’s revenue surge to broad-based strength across several revenue lines, namely Petroleum Profit Tax (PPT), Hydrocarbon Tax (HT), Companies Income Tax (CIT), Capital Gains Tax (CGT), Stamp Duty Tax (SDT), Petroleum Royalties, Mineral Royalties, Excise Duty and Gas Flared Penalty, all of which recorded significant increases in the month under review.
The figures, which showed improved revenue collections across oil and non-oil statutory sources, however, revealed that Gross VAT revenue marginally dipped to N793.968 billion, representing 0.7% decline from N799.746 billion raked in from the source in the preceding month. Others will lower revenue yield include Import Duty, CET Levies, Rental of Gas Flared Fee and Miscellaneous Oil Revenue.
The FAAC maintained that it would continue to monitor these revenue sources with lower collections by working with revenue-generating agencies to close collection gaps and improve remittance discipline.
Beyond revenue matters, the committee reaffirmed its commitment to full, transparent and timely remittance of collectible revenue by all revenue-generating agencies into the Federation Account, ahead of the accounts reconciliation exercise for the period, and sustain its emphasis on the need to diversify the federation’s revenue base beyond oil, in line with ongoing tax administration and non-oil revenue mobilisation reforms.
It stated that this would be in alignment between FAAC’s technical work and the NACOFED platform, reinforcing coordination between the Federal Government and States on fiscal policy, revenue-sharing and shared economic development priorities.
The FAAC promised to continue its monitoring of solid minerals and other non-oil royalty streams as a growth area for future federation revenue.
The Committee stressed that sustaining the statutory revenue gains recorded in July 2026 would depend on continued fiscal discipline in terms of revenue collection and remittance across Ministries, Departments and Agencies (MDAs), and reiterated its support for reforms aimed at improving the predictability and growth of allocations to all three tiers of government.
At the NACOFED programme, the FAAC session discussed state of the economy, fiscal governance, and federal and subnational fiscal fitness and sets out the scale of the recent revenue windfall and called for deliberate reform to convert it into durable fiscal strength rather than a temporary gain.
The participants at the session noted that gross FAAC had risen over the past three years driven by subsidy removal, exchange-rate unification and tax reform.
The session highlighted the impact of the Nigeria Tax Act 2025, effective 1 January 2026: states’ share of VAT revenue rises from 50% to 55% (the Federal Government’s falls from 15% to 10%), while 30% of the states’ VAT pool is now allocated by place of consumption rather than a company’s registered headquarters – directly linking a state’s own economic activity to the size of its federation allocation.
To consolidate on the achievements, they harped on the for diversifying own-source income beyond a narrow tax base, inventorying and putting idle state-owned assets to productive use, measuring and expanding the state and national economy, including through official state GDP data, a stable, predictable business environment and structured investor engagement.
In addition, the participants agreed on the imperative of sustained investment in education and health as the foundation of future development; timely, audited and transparent public accounts, while all tiers of government were encouraged to use the current period of strong revenue growth to institutionalise reforms including comprehensive asset registers, payroll verification, and timely publication of audited accounts over the next twelve months.
