The Federation Account Allocation Committee shared N2.33 trillion among the three tiers of government in its latest monthly disbursement after statutory revenue into the Federation Account slumped by 34.62 percent.
FAAC convenes each month to distribute federally collected revenue among the Federal Government, the 36 states and the 774 local government areas. The pool typically draws on statutory revenue, value added tax, the electronic money transfer levy and exchange-rate gains. A contraction in the statutory component therefore reduces the total amount available for sharing.
The 34.62 percent fall in statutory revenue is significant because statutory receipts form the core of the Federation Account, the central pool into which federally collected revenues are paid before statutory sharing. The decline points to weaker collections across the major revenue heads managed by federal revenue agencies. When statutory inflows weaken, monthly allocations to federal, state and local governments come under pressure, limiting the resources available for recurrent expenditure, capital projects and debt service.
For the 36 states, FAAC transfers are a critical source of cash flow, and many rely on the monthly disbursements to meet salary obligations and fund basic public services. A smaller allocation can tighten sub-national budgets and delay planned spending. For the Federal Government, weaker statutory receipts complicate budget implementation and widen the gap between revenue projections and actual collections.
The figures highlight the exposure of Nigeria's fiscal framework to movements in federally collected revenue. They also reinforce the case for stronger tax administration, broader tax coverage and reduced revenue leakages to stabilise inflows into the Federation Account and support fiscal sustainability across all tiers of government.
