Federation Revenue Shared Amidst Mixed Performance

The Federation Account Allocation Committee (FAAC) has distributed a total of ₦1.894 trillion in revenue for February 2026. The disbursement took place during the committee's March meeting in Abuja, as confirmed in a communiqué signed by Bawa Mokwa, Director of Press and Public Relations.

The total gross revenue available for the month stood at ₦2.230 trillion. However, after mandatory deductions—including ₦77.302 billion for collection costs and ₦259.078 billion for refunds, savings, and transfers—the distributable balance was finalized.

The Breakdown of Shared Funds

The ₦1.894 trillion distributable pool was allocated across the three levels of government as follows:

  • Federal Government: Received ₦675.088 billion.

  • State Governments: Shared ₦651.525 billion.

  • Local Government Councils: Disbursed ₦456.467 billion.

  • Oil-Producing States: Allocated ₦110.949 billion as 13% derivation revenue.

Revenue Trends: VAT and Statutory Earnings Decline

While the shared amount remains substantial, the report highlighted a sharp decline in key revenue streams compared to January 2026. Gross statutory revenue dropped by ₦395.138 billion, while Value Added Tax (VAT) saw a significant plunge of ₦414.710 billion.

Comparative Revenue Performance: February vs. January 2026

The February revenue cycle was marked by a sharp contrast in performance across Nigeria’s primary earning streams. While the federation still shared a significant sum, the gross intake saw a substantial contraction compared to the record-breaking figures of January.

Statutory Revenue Contraction

The gross statutory revenue for February 2026 was recorded at ₦1.561 trillion. When compared to the ₦1.957 trillion generated in January 2026, this represents a significant dip of ₦395.138 billion. This decline is largely attributed to the underperformance of critical tax heads such as the Petroleum Profit Tax (PPT) and Companies Income Tax (CIT), which failed to match the momentum of the preceding month.

Sharp Decline in VAT Earnings

Perhaps the most striking shift occurred in Value Added Tax (VAT) collections. The gross VAT revenue for February stood at ₦668.450 billion, a steep fall from the ₦1.083 trillion recorded in January. This reflects a massive reduction of ₦414.710 billion in just thirty days. Analysts typically attribute such fluctuations to seasonal spending habits and the conclusion of major year-end corporate tax cycles that often peak in January.

Resilient Oil and Customs Sectors

Despite the overall downturn in tax-based revenue, certain sectors showed resilience:

  • Oil and Gas Royalties and Excise Duty recorded notable increases, providing a vital cushion for the Federation Account.

  • Import Duty and the Common External Tariff (CET) also showed slight upward movement, suggesting that trade and energy-related income remained steady even as domestic tax collections cooled.

  • Winners and Losers by Sector

    The communiqué provided a granular look at which sectors bolstered the federation account and which underperformed:

    • Increases: Notable growth was recorded in Oil and Gas Royalties, Excise Duty, Import Duty, and the Common External Tariff (CET).

    • Declines: Significant revenue drops were observed in Petroleum Profit Tax (PPT), Companies Income Tax (CIT), Capital Gains Tax, Stamp Duties, and Hydrocarbon Tax.

    "The decline in key tax categories like CIT and VAT suggests a cooling from January's peaks, even as oil-related royalties provide a much-needed buffer for the national treasury."