Nigeria shares N2.55trn as non-oil taxes drive revenue surge
Nigeria's three tiers of government shared N2.55 trillion in June, driven by a sharp rise in non-oil tax receipts that signals improving corporate activity and broader fiscal liquidity.
The Federation Account Allocation Committee (FAAC) distributed N2.550 trillion to federal, state, and local governments for June, up from N2.3 trillion in May. According to Bawa Mokwa, Director of Press and Public Relations at the Office of the Accountant-General of the Federation, the increase followed a 32.6% jump in gross federation revenue to N4.500 trillion.
From the gross revenue, N160.744 billion was deducted for collection costs and N1.789 trillion went to transfers and refunds, leaving the N2.550 trillion distributable pool. This pool comprised N1.809 trillion from statutory revenue and N740.724 billion from Value Added Tax.
For investors tracking Nigeria's economic diversification, the composition of the revenue gain is critical. The disbursement growth was primarily powered by higher collections from Companies Income Tax, Capital Gains Tax, Stamp Duties, and import duties. Gross VAT revenue reached N799.746 billion.
“This is higher than the N743.688 billion available in the month of May by N56.078 billion,” the FAAC communiqué stated. The consistent rise in consumption and corporate taxation points to underlying economic momentum outside the traditional hydrocarbon sector.
Conversely, petroleum-specific revenues contracted considerably during the month. Petroleum Profit Tax and Hydrocarbon Tax collections declined, highlighting ongoing structural headwinds in Nigeria's upstream oil industry despite higher receipts from petroleum royalties and gas flaring penalties.
The N2.550 trillion distribution allocates N923.438 billion to the Federal Government, while the 36 state governments received N838.208 billion. Local government councils collected N591.390 billion. Oil-producing states received N197.610 billion as their constitutionally mandated 13% derivation revenue.
The increased disbursements will be closely monitored by fixed-income markets. Higher FAAC allocations typically improve state governments' ability to meet debt service obligations and fund infrastructure. The shift toward broader tax revenues over volatile oil income represents a fiscal transition that capital markets will continue to evaluate.
