Significant Revenue Growth Reported by FAAC
Emmanuel Ade reports from Abuja that the Federal Accounting Allocation Committee (FAAC) has announced a notable increase in distributable revenue for the first quarter of 2026. Year-on-year, the revenue has surged by 18.7%, marking a substantial fiscal uplift for federal, state, and local governments.
Revenue Distribution Breakdown
According to reconciled data from official FAAC releases, the total revenue allocated to governmental bodies reached N5,887 billion in the first quarter of 2026. This figure reflects a significant rise of N928 billion compared to the N4,959 billion distributed during the same period in 2025.
Dynamic Quarterly Performance
While the overall growth indicates a positive trend in revenue generation, the quarterly data exhibited notable fluctuations in certain tax categories. Month-by-month analysis reveals that the year-on-year growth persisted throughout the period, commencing with robust earnings in January.
January Sees Strong Distribution
In January 2026, the FAAC distributed N1,957 billion, demonstrating a 14.9% increase from the N1,703 billion allocated in January 2025. This early momentum can largely be attributed to a historic spike in Value Added Tax (VAT) collections, which briefly surpassed the N1 trillion mark.
February’s Slight Slowdown
February 2026 witnessed a slight dip, with a distribution of N1.894 trillion. However, this figure still marked a 12.9% improvement over the N1.678 trillion allocated in February 2025.
March Brings Record Growth
The quarter concluded on a high note, with March 2026 registering the most significant year-over-year increase. The FAAC distributed N2,036 billion that month, reflecting a remarkable 29% rise from the N1,578 billion allocated in March the previous year. This surge was largely driven by a substantial increase in statutory revenue, reaching N1,699 billion, and a strategic N200 billion investment to stabilize the distributable pool.
Shifts in Revenue Composition
The distribution dynamics of the first quarter of 2026 showcased evolving trends within the Nigerian economy. While statutory income remained the largest revenue stream for the federation, its growth was significantly affected by fluctuations in exchange rates. The adjustments to the Nigerian Naira against major currencies provided a considerable buffer for accounts, enhancing revenue even amid challenges in oil production logistics.
Impact of Revenue Authorities and Collection Costs
The performance of the Federal Inland Revenue Service, Nigeria Revenue Service (NRS), and Nigeria Customs Service (NCS) contributed significantly to the N928 billion increase. Although total revenue rose, collection costs escalated concurrently. Agencies such as the NRS and NCS, along with the Nigeria Upstream Petroleum Regulatory Commission (NUPRC), experienced nominal increases in their statutory deduction rates, which typically range from 4% to 7% of revenue. These funds cover operational costs while ensuring statutory transfers were effectively managed. Furthermore, the average monthly payment to the Federal Government rose from approximately N560 billion in the first quarter of 2025 to around N718 billion in 2026.
