Nigeria’s gross Federation Account Allocation Committee (FAAC) revenue rose to N18.72 trillion in the first half of 2026, while N12.59 trillion was shared among the federal, state and local governments, representing 67 per cent of the total revenue generated during the period.
The figures are contained in a new report released by Agora Policy, which also revealed that Lagos State received the highest gross FAAC allocation at N477.05 billion, while Nasarawa State received the least with N72.78 billion.
According to the report, the remaining N6.13 trillion, representing 33 per cent of gross revenue, was deducted for savings, interventions, refunds, transfers and collection costs.
Statutory revenue remained the largest contributor to FAAC earnings, accounting for N13.95 trillion or 75 per cent of total revenue, while Value Added Tax (VAT) generated N4.77 trillion, representing 25 per cent.
The report showed that distributable revenue increased by 24.4 per cent year-on-year, rising from N10.12 trillion in the first half of 2025 to N12.59 trillion during the same period in 2026. At the same time, FAAC deductions dropped by 16 per cent, declining from N7.30 trillion to N6.13 trillion.
Of the distributable revenue, the Federal Government received N4.57 trillion, the 36 states shared N4.47 trillion, while the 774 local government councils received N3.13 trillion. Oil-producing states also received N864.89 billion as 13 per cent derivation allocation.
The report noted a shift in revenue distribution in favour of the Federal Government, which reclaimed the largest share of FAAC allocations after states received a slightly higher allocation than the centre during the corresponding period in 2025.
A breakdown of deductions showed that Savings accounted for N2.30 trillion, while Interventions totalled N2.14 trillion, making them the largest components of FAAC deductions. Refunds stood at N714.51 billion, the cost of collection was N665.48 billion, while transfers amounted to N311.84 billion.
Agora Policy also highlighted the remarkable growth in FAAC revenue over the past five years, noting that gross revenue increased by 323 per cent, from N4.43 trillion in the first half of 2021 to N18.72 trillion in H1 2026.
The report stated that the amount generated between January and June 2026 exceeded the total gross FAAC revenue recorded in 2021, 2022 and 2023 individually. It also represented 52 per cent of the N35.81 trillion generated throughout 2025.
“If this trend of revenue performance continues in the second half of the year, the gross FAAC revenue for 2026 may exceed that of 2025,” the report stated.
It further revealed that refunds declined sharply by 80 per cent compared to H1 2025, reducing their contribution to total deductions from 47 per cent to 12 per cent.
Conversely, savings rose by 151 per cent, accounting for 37 per cent of all deductions compared to 15 per cent in the corresponding period of 2025.
Intervention spending remained significant, with N1 trillion allocated to the National Security Fund, N777 billion for the Infrastructure Development Fund for States, N250 billion for the Military Intervention Fund, and N108 billion for state security interventions.
The report also identified June as the highest revenue-generating month with N4.50 trillion, largely driven by higher Company Income Tax (CIT) collections and annual tax remittances, while February recorded the lowest revenue at N2.23 trillion.
Among the states, Lagos and Oyo recorded the highest year-on-year growth in gross FAAC allocations at 41.5 per centand 36.4 per cent, respectively. Edo and Delta recorded the slowest growth, with increases of 16.4 per cent and 16.8 per cent.
The report showed that 20 states received between N100 billion and N300 billion, while nine states received less than N100 billion. Lagos, Delta, Rivers and Akwa Ibom each received more than N300 billion in gross allocations.
Agora Policy also observed that having more local government areas does not automatically result in higher FAAC allocations. Although Kano has the highest number of LGAs, its councils received N163.5 billion, almost half of the N310.85 billion allocated to Lagos’ 20 local governments.
According to the report, the growing importance of VAT in the revenue-sharing formula has increasingly favoured states with highly urbanised and commercially active local governments, such as Lagos and Rivers.
Overall, the report concluded that the first half of 2026 recorded stronger FAAC performance than the corresponding period in 2025, driven by higher revenue generation, a larger distributable pool and reduced deductions.
