Nigeria's three tiers of government have another month of rising federation revenue to share, with statutory collections climbing to their highest level on record even as VAT receipts pulled in the opposite direction.

The Federation Account Allocation Committee has shared a total of ₦2.300 trillion among the federal, state, and local governments as revenue allocation for May 2026. The total distributable revenue comprised ₦1.611 trillion from Statutory Revenue and ₦688.785 billion from Value Added Tax, according to the Ministry of Finance, in a statement by the Head of Information and Public Relations, Efe Ovuakporie.

A communiqué issued after the meeting showed that total gross revenue available in May stood at ₦3.395 trillion. From this amount, ₦123.546 billion was deducted as the cost of collection, while ₦971.610 billion was set aside for transfers and refunds.

The statutory revenue line was the clear standout. Gross statutory revenue rose to ₦2.651 trillion in May from ₦2.378 trillion in April, an increase of ₦273.623 billion. The committee attributed the rise to a sharp pickup in specific tax streams: "In May 2026, Companies Income Tax, CGT, SDT, Petroleum Profit Tax, Hydrocarbon Tax, Oil and Gas Royalty increased significantly, while Import Duty, Value Added Tax, Excise Duty, and CET Levies decreased considerably."

VAT moved in the opposite direction. Gross VAT revenue fell to ₦743.668 billion in May from ₦806.617 billion recorded in April, a decrease of ₦62.949 billion.

A breakdown of the ₦2.300 trillion distributable revenue showed that the Federal Government received ₦818.680 billion, while state governments received ₦759.141 billion. The 774 local government councils received ₦534.277 billion, while oil-producing states shared ₦188.132 billion as 13% derivation revenue.

From the ₦1.611 trillion statutory revenue, the Federal Government received ₦749.801 billion, states received ₦380.309 billion, while local governments got ₦293.202 billion. The oil-producing states also received ₦188.132 billion as derivation revenue from the statutory component. The distributable VAT revenue of ₦688.785 billion was shared with the Federal Government receiving ₦68.879 billion, state governments receiving ₦378.832 billion, and local government councils receiving ₦241.075 billion.

The month-on-month gain, while real, was modest in percentage terms. The latest allocation represents an increase of ₦43 billion over the ₦2.26 trillion distributed in April, reflecting a 1.9% month-on-month growth in distributable revenue.

Combined, the Federal Government, the 36 states, and 774 local government councils received N4.557 trillion from FAAC within 30 days, following the distribution of revenues generated in both April and May 2026.

While VAT receipts, import duties, and excise duties weakened during the month, higher collections from Companies Income Tax, Petroleum Profit Tax, Hydrocarbon Tax, and oil and gas royalties helped offset the decline and pushed statutory revenue to a new high. For state governors and local council chairs already grappling with a ₦100,000 minimum wage standoff and mounting ₦1 million wage demands from organised labour, the steady FAAC growth offers at least some fiscal room, even if it remains far short of resolving the underlying affordability crisis driving those demands.

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