Nigeria’s Federation Account Allocation Committee (FAAC) has shared a total of N2.300 trillion among the three tiers of government as revenue allocation for May 2026, reflecting improved earnings from key tax sources and petroleum-related revenues.
The allocation was approved during the committee’s monthly meeting and distributed among the Federal Government, state governments, local government councils, and oil-producing states entitled to derivation revenue.
According to details released by the Ministry of Finance, the total distributable revenue consisted of N1.611 trillion generated from statutory revenue and N688.785 billion derived from Value Added Tax (VAT).
From the total amount distributed, the Federal Government received N818.680 billion. State governments collectively got N759.141 billion, while local government councils received N534.277 billion to support grassroots development and public services across the country.
In addition, oil-producing states were allocated N188.132 billion as 13 percent derivation revenue, a constitutional provision that allows states producing crude oil and other mineral resources to receive an extra share from earnings generated within their territories.
The latest allocation highlights a continued improvement in government revenues despite challenges facing parts of the economy.
FAAC reported that the gross statutory revenue available in May 2026 stood at N2.652 trillion. This represented an increase of N273.623 billion when compared with the N2.378 trillion recorded in April 2026.
The increase was largely driven by stronger collections from several major revenue sources. These included Companies Income Tax (CIT), Capital Gains Tax (CGT), Stamp Duties, Petroleum Profit Tax (PPT), Hydrocarbon Tax (HT), and Oil Royalties.
The improved performance of these revenue streams contributed significantly to the overall increase in funds available for distribution among the three tiers of government.
Companies Income Tax continued to benefit from business activities across various sectors, while petroleum-related taxes and royalties received support from developments in the oil and gas industry. The rise in these collections helped offset weaknesses recorded in other areas of revenue generation.
Despite the positive revenue performance, some tax categories recorded declines during the month.
FAAC noted that collections from Import Duty, Value Added Tax (VAT), Excise Duty, and Common External Tariff (CET) Levies fell when compared to figures recorded in April.
In particular, gross VAT revenue declined to N743.668 billion in May from N806.617 billion in the previous month. The drop reflects lower collections from consumption-related activities during the period.
However, the reduction in VAT earnings did not significantly affect the overall revenue outlook, as gains from petroleum taxes and corporate income taxes more than compensated for the shortfall.
The committee emphasized that stronger receipts from oil-related revenues and Companies Income Tax played a major role in sustaining government earnings and boosting the amount available for distribution.
Economic analysts believe the higher allocation could provide additional fiscal support to governments at all levels, enabling them to fund infrastructure projects, pay salaries, improve public services, and meet development objectives.
As Nigeria continues efforts to strengthen revenue generation and reduce dependence on borrowing, the increase in distributable revenue is expected to provide a welcome boost to public finances and support economic activities across the country.
The May 2026 allocation also underscores the importance of tax collections and petroleum revenues as major pillars of government funding in Nigeria’s economy.
