FAAC Shares ₦2.43trn as Oil Revenue Rebounds

The Federal Government, the 36 states and the 774 local government councils shared ₦2.428 trillion from the Federation Account in October 2026, up ₦90 billion, or 3.85%, from the ₦2.338 trillion shared in September, according to the Office of the Accountant-General of the Federation. The money is September revenue, approved at the October meeting of the Federation Account Allocation Committee (FAAC). Oil taxes and royalties drove the rise, while Value Added Tax (VAT) slipped. Here is the breakdown and why it matters beyond government budgets.

How FAAC works

Each month, FAAC shares the revenue collected in the previous month among the three tiers of government. Statutory revenue covers oil and non-oil taxes, royalties and duties. VAT is shared under its own formula, which gives most of it to states and councils. That is why a month's VAT figure matters so much to state budgets.

Who got what

The Office of the Accountant-General said in a statement on 15 October that the distributable amount was made up of ₦1.672 trillion in statutory revenue and ₦756.587 billion in VAT. Punch and TheLink compared the split with September.

The biggest winners were oil-producing states. Their 13% derivation share rose 28%, much faster than the overall pool. That reflects stronger oil-linked receipts in September.

Statutory revenue up, VAT down

The two parts of the pool moved in opposite directions.

• Statutory revenue. Gross statutory revenue rose ₦246.384 billion, or about 8.6%, to ₦3.096 trillion in September from ₦2.850 trillion in August. Petroleum Profit Tax, Hydrocarbon Tax, petroleum royalties, import duty, Common External Tariff levies and excise duty all increased.
• VAT. Gross VAT fell ₦17.972 billion, or about 2.2%, to ₦816.872 billion from ₦834.843 billion. Companies Income Tax, Capital Gains Tax and stamp duties also declined.

The VAT split is very different from the statutory split. Of the ₦756.587 billion distributable VAT, states received ₦416.123 billion and councils ₦264.805 billion, while the Federal Government received only ₦75.659 billion. Of the statutory revenue, the Federal Government took ₦756.583 billion, states ₦383.749 billion and councils ₦295.855 billion. So a fall in VAT hurts states and councils more than the centre.

Why the gross rise did not all reach the pool

Total gross revenue into the Federation Account rose ₦228 billion, or 6.2%, to ₦3.913 trillion. But only ₦90 billion more was shared. Punch's analysis shows why. Cost of collection rose to ₦131.758 billion from ₦125.142 billion, and transfers, refunds and savings rose ₦131 billion to ₦1.352 trillion. Those deductions come off the top before anything is shared.

Still below the August record

October's pool is a partial recovery, not a return to the peak.

The October figure is ₦579 billion, or 19.3%, below August, which Punch described as the highest monthly FAAC payout in records it reviewed going back to 2019. Gross statutory revenue in July had been ₦4.359 trillion, so September's ₦3.096 trillion is still well short of that level.

The oil link

Oil prices are high. Brent crude closed at US$105.86 a barrel on 15 October, according to AIICO Capital. If prices and output hold, oil-linked taxes and royalties should keep supporting the pool in coming months. But FAAC figures can swing sharply from month to month, as the drop from August to September showed, so one month of recovery is not a trend.

What this means for investors

• State bonds and credit. States depend heavily on FAAC. Bigger, steadier allocations make it easier for them to pay salaries and service debt, which matters if you hold a state bond. Allocations that swing by hundreds of billions of naira month to month are a risk to watch.
• Oil states gain most. The 28% jump in derivation helps oil-producing states first.
• VAT is a consumer signal. A small dip in VAT receipts can hint at softer spending or collection gaps. One month is not enough to judge, but it is worth tracking alongside inflation, which eased to 14.63% in September.
• Spending flows into the economy. Higher payouts to the three tiers usually mean more government spending, which can lift naira liquidity in banks and the money market.
• Look past the headline. Gross revenue rose 6.2% but the shared pool rose only 3.85%. Deductions matter.

This is for information only and is not investment advice.

FAQ

How much did FAAC share in October 2026?

FAAC shared ₦2.428 trillion of September 2026 revenue among the Federal Government, states and local government councils, up from ₦2.338 trillion in September.

How much did states get from FAAC in October 2026?

The 36 states received ₦799.872 billion, and oil-producing states shared a further ₦236.049 billion as 13% derivation revenue.

Why did FAAC allocation rise in October?

Statutory revenue rose on higher petroleum taxes, royalties, import duty and excise, which more than offset a 2.2% fall in VAT.

Sources

• Punch, "FAAC allocation rises to N2.43tn as oil revenue rebounds" (15 Oct 2026)
• TheLink, "FG, states, LGs share N2.43tn in October as federation revenue recovers" (15 Oct 2026)
• AIICO Capital, "Financial Markets Today, 15 October 2026"
• National Bureau of Statistics, Consumer Price Index September 2026 (released 15 Oct 2026)