The Federation Account Allocation Committee (FAAC) disbursed N3.40 trillion to the three tiers of government in June, representing an increase from the N3.18 trillion recorded in May.
The National Bureau of Statistics (NBS) confirmed the figures, noting that the combined allocation for the two months of May and June reached N6.58 trillion. This upward trend in monthly disbursements provides additional liquidity to federal, state, and local government accounts, which are essential for funding public services and administration across Nigeria.
The increase in available funds arrives as various state governments manage their mid-year budgetary obligations and recurrent expenditure demands.
Revenue distribution trends
The rise in the June FAAC disbursement follows a period of varying revenue collections within the federation account. With the May allocation standing at N3.18 trillion, the June figure of N3.40 trillion shows a monthly increase of approximately N220 billion.
FAAC is the body tasked with the equitable distribution of revenues collected into the Federation Account. These revenues include proceeds from oil sales, petroleum profits, taxes, and other statutory collections. The funds are shared among the three tiers of government: the Federal Government, the 36 State Governments, and the 774 Local Government Areas.
Economic analysts monitor these figures closely as they directly impact the fiscal capacity of state and local governments. Higher disbursements can assist states in meeting salary obligations and overheads, as well as providing resources for capital projects. However, the volatility of these figures often reflects fluctuations in global oil prices and the efficiency of non-oil revenue collection by the Federal Inland Revenue Service (FIRS).
As Nigeria continues its transition towards a more diversified economy, the proportion of non-oil revenue in these FAAC disbursements remains a critical metric for long-term fiscal sustainability. The increased liquidity is expected to impact the budget execution of various state governments as they navigate their mid-year fiscal requirements.
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