Higher Revenue Collection Lifts FAAC Distribution to N2.6trn in June 2026

By FBNQuest Research

According to the communiqué released by the Federation Account Allocation Committee (FAAC), total revenue distributed among the three tiers of government stood at N2.6trn in June 2026 (from May 2026 revenue).

This represents an increase from the N2.3trn distributed in the previous month, extending the upward trend in federally collected revenues so far this year. Revenue mobilisation has improved considerably this year, supported by the ongoing benefits of tax reforms, greater digitalisation of revenue collection processes, and stronger taxpayer compliance.

In addition to improved non-oil revenue performance, the oil sector has remained a significant contributor to government revenues.

Although crude oil production remains below the 2026 budget benchmark of 1.84 million barrels per day (mb/d), oil prices have been supportive, consistently trading above the budget benchmark of US$64.85/b.

This favourable oil price environment has helped cushion the impact of lower production volumes and bolstered overall revenue collections.

Turning to FAAC data, the stronger revenue outturn was primarily driven by a significant rise in statutory revenue, which increased by N550bn month-on-month (MoM) to N1.8trn, compared with N1.3trn in the previous month.

In contrast, value-added tax (VAT) revenue declined marginally by 1% MoM to N740.7bn.

Reflecting the overall increase in revenue collections, allocations to all tiers of government improved during the month. Disbursements to the federal government increased by 17% MoM to N923bn.

Similarly, allocations to state and local governments increased to N838bn and N591bn, respectively, up from N772bn and N549bn in the previous month.

Allocations to oil-producing states through the 13% derivation fund recorded a strong increase of 26% MoM to N198bn.

Looking ahead, Quest MB’s analysts anticipate sustained expansion of federally collected revenues, underpinned by elevated crude oil prices and a steady increase in production volumes, which should continue to support oil revenue performance.

In addition, ongoing reform initiatives, enhanced compliance, and improvements in revenue collection systems and processes are expected to sustain growth in non-oil revenues and further strengthen the government’s revenue base