Improved revenue inflows from taxes, customs duties and oil-related sources boosted government earnings in June, enabling the Federation Account Allocation Committee (FAAC) to distribute ₦2.551 trillion among the Federal Government, states and local government councils.
The allocation, approved at FAAC’s June meeting in Abuja, reflects a significant increase in revenues accruing to the Federation Account and provides fresh fiscal resources for governments across the country amid mounting expenditure demands.
The distributable amount comprised ₦1.810 trillion from statutory revenue and ₦740.724 billion generated from Value Added Tax (VAT), according to details released after the meeting.
From the total allocation, the Federal Government received ₦923.438 billion, while the 36 state governments shared ₦838.208 billion. The 774 local government councils received ₦591.390 billion, while oil-producing states got ₦197.610 billion as their 13 per cent derivation entitlement.
The distribution highlights the continued importance of federal allocations to subnational governments, many of which rely heavily on monthly FAAC receipts to finance salaries, infrastructure projects and social services.
Analysis of the statutory revenue component showed that the Federal Government received ₦849.366 billion, states got ₦430.810 billion and local councils received ₦332.136 billion. The balance of ₦197.610 billion was allocated to oil-producing states under the derivation formula.
VAT revenue remained a major contributor to the federation’s earnings. Out of the ₦740.724 billion shared from VAT proceeds, states received the largest portion at ₦407.398 billion, while local governments received ₦259.253 billion. The Federal Government’s share stood at ₦74.072 billion.
The strong allocation was supported by a sharp rise in revenue collections during the month. Gross revenue available in June climbed to ₦4.501 trillion, consisting of ₦3.701 trillion in statutory revenue and ₦799.746 billion in VAT collections.
Compared with the previous month, statutory revenue increased by more than ₦1 trillion, driven by stronger receipts from Companies Income Tax, VAT, import duties, customs levies, petroleum royalties, gas flare penalties and other oil-related revenues.
The figures point to improved revenue mobilisation efforts and a broader contribution from non-oil sources, which have become increasingly important in sustaining government finances.
VAT collections also posted impressive growth. Gross VAT revenue rose from ₦743.668 billion recorded in May to ₦799.746 billion in June, an increase of ₦56.078 billion.
However, the revenue report also revealed weaknesses in some traditional income sources. Collections from Petroleum Profit Tax, Hydrocarbon Tax, mineral royalties and related fees declined during the period, underscoring the challenges still facing parts of the energy sector.
The higher allocations come at a critical time for governments struggling to balance rising recurrent expenditure with growing demands for investment in infrastructure, healthcare, education and economic development.
For state governments in particular, the increased inflows could provide additional support for ongoing projects and help cushion the impact of economic pressures on public finances.
The latest FAAC figures also reflect the changing structure of government revenue, with taxes and consumption-based earnings playing a larger role alongside petroleum income.
As governments receive larger shares from the Federation Account, stakeholders are expected to closely monitor how the funds are utilised to address development priorities and improve service delivery across the country.
The June distribution represents another indication of strengthening public revenues, even as policymakers continue efforts to sustain economic reforms and expand the country’s fiscal base.
Leave a Reply