Gross revenue shared by the Federation Account Allocation Committee (FAAC) rose to N18.72 trillion in the first half of 2026, with N12.59 trillion distributed among the three tiers of government, according to a report by Agora Policy.
The report revealed that the remaining N6.13 trillion, representing 33 per cent of total revenue generated during the period, was deducted for savings, interventions, refunds, transfers, and collection costs.
Lagos State emerged as the highest recipient of Gross FAAC allocations during the period, receiving N477.05 billion, while Nasarawa State received the lowest allocation at N72.78 billion.
Statutory revenue accounted for the largest share of FAAC receipts, contributing N13.95 trillion, representing 75 per cent of total gross revenue, while Value Added Tax (VAT) contributed N4.77 trillion, or 25 per cent.
The N12.59 trillion distributable revenue was shared among the federal government, the 36 states, and the 774 local government areas.
The federal government received N4.57 trillion, states received N4.47 trillion, while local governments received N3.13 trillion.
Oil-producing states also received N864.89 billion as derivation allocation.
The report noted 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 in the same period of 2026.
FAAC deductions also declined by 16 per cent, dropping from N7.30 trillion in H1 2025 to N6.13 trillion in H1 2026.
The distribution pattern shifted in favour of the federal government, unlike in H1 2025 when states collectively received a slightly higher share than the federal government.
In the first half of 2025, states received N3.43 trillion compared with the federal government’s N3.39 trillion.
A breakdown of deductions showed that savings and interventions accounted for the largest portions, with N2.30 trillion and N2.14 trillion respectively.
Refunds amounted to N714.51 billion, collection costs stood at N665.48 billion, while transfers accounted for N311.84 billion.
The report further showed that gross FAAC revenue increased significantly by 323 per cent between H1 2021 and H1 2026, rising from N4.43 trillion to N18.72 trillion.
It added that the revenue generated in the first six months of 2026 exceeded the total gross FAAC revenue recorded for the entire years of 2021, 2022, and 2023.
Agora Policy said if the current revenue trend continues in the second half of the year, total FAAC revenue for 2026 could surpass the N35.81 trillion recorded in 2025.
The report highlighted a major decline in refunds, which fell by 80 per cent compared with H1 2025. Refunds accounted for 47 per cent of FAAC deductions in H1 2025 but dropped to 12 per cent in H1 2026.
Meanwhile, savings from gross FAAC revenue increased by 151 per cent and became the largest component of deductions, accounting for 37 per cent compared with 15 per cent in the corresponding period of 2025.
Intervention funds increased during the period, with allocations including N1 trillion for 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 Intervention.
June recorded the highest monthly Gross FAAC revenue in H1 2026 at N4.50 trillion, driven largely by higher Company Income Tax collections and annual tax remittances.
February recorded the lowest revenue at N2.23 trillion.
Lagos and Oyo states recorded the highest year-on-year increases in Gross FAAC allocations, rising by 41.5 per cent and 36.4 per cent respectively, while Edo and Delta recorded the lowest increases at 16.4 per cent and 16.8 per cent.
Twenty states received between N100 billion and N300 billion during the period, while nine states received less than N100 billion. Lagos, Delta, Rivers, and Akwa Ibom each received more than N300 billion.
The report also noted that the number of local government areas does not necessarily determine higher FAAC allocations.
Although Kano has the highest number of local governments with 44, its combined allocation of N163.5 billion was significantly lower than Lagos’ N310.85 billion received by its 20 local governments.
The report attributed this trend partly to the growing importance of VAT revenue, noting that states with highly commercial urban local governments, such as Lagos and Rivers, benefit from higher consumption levels.
Agora Policy concluded that FAAC performance in the first half of 2026 was slightly stronger than the corresponding period in 2025, with increased revenue generation, a larger distributable pool, and reduced deductions.
