. As CBN declares over $52.5bn in foreign reserves
The Federal Government, the 36 states and the 774 Local Government Councils shared a total of N3.007tn as federation revenue for July 2026, as statutory collections rose by N658.09bn, driven by improved receipts from petroleum and non-oil taxes.
The disbursement was approved at the August 2026 meeting of the Federation Account Allocation Committee held in Owerri, Imo State.
A statement issued on Tuesday by the Director of Press and Public Relations in the Office of the Accountant-General of the Federation, Bawa Mokwa, said the gross statutory revenue rose to N4.359tn in July from N3.700tn recorded in June.
The increase represented N658.087bn, or 17.8 per cent, signalling stronger collections across several oil and non-oil revenue sources.
However, gross Value Added Tax revenue declined marginally to N793.968bn in July from N799.746bn in the preceding month, representing a decrease of N5.778bn, or 0.7 per cent.
The statement read, “In its regular monthly business, FAAC approved the disbursement of a total of N3.007tn to the Federal Government, the 36 State Governments and the 774 Local Government Councils as revenue for July 2026.
“The month’s figures point to a strengthening underlying revenue base. Gross statutory revenue rose to N4.359 trillion in July 2026, up N658.087bn, a 17.8 per cent increase, from N3.700tn in June 2026, reflecting improved collection performance across oil and non-oil statutory sources. Gross VAT revenue held broadly steady at N793.968bn, a marginal decline of N5.778bn (0.7 per cent) from N799.746bn in June, suggesting consumption-tax receipts remain resilient month-on-month.”
The communiqué showed that Petroleum Profit Tax, Hydrocarbon Tax, Companies Income Tax, Capital Gains Tax, Stamp Duty Tax, petroleum royalties, mineral royalties, excise duty and gas flaring penalties recorded increases during the month.
The gains, however, were partly offset by declines in VAT, import duty, CET levies, rental of gas flaring fees and miscellaneous oil revenue.
“The Committee will continue to monitor as it works with revenue-generating agencies to close collection gaps and improve remittance discipline,” Bawa stated.
The development comes amid a sustained rise in revenues accruing to the Federation Account following major fiscal reforms, including the removal of petrol subsidy, foreign exchange reforms and efforts to widen the tax base.
Beyond the monthly allocation, the Owerri meeting also shifted attention to a broader question confronting the country’s three tiers of government: whether rising federation allocations would translate into stronger state economies, improved infrastructure and better social services.
The FAAC meeting, which was held on the sidelines of the National Council of Federation and Economic Development, brought together finance commissioners and accountants-general to discuss the fiscal health of the federation and ways of converting recent revenue growth into long-term economic strength.
Bawa said government officials were urged to focus on six key areas described as vital to fiscal fitness, including improving the quality of internally generated revenue, strengthening and commercialising public assets, expanding economic activity, attracting private capital, investing in human capital and improving transparency in public finance.
“The FAAC convened its August 2026 meeting in Owerri, the Imo State capital, on the margins of the ongoing National Council of Federation and Economic Development, pairing the Committee’s routine monthly business with a broader push to strengthen fiscal fundamentals across Nigeria’s federating units.
“The FAAC session discussed the state of the economy, fiscal governance, and federal and subnational fiscal fitness. The session set out the scale of the recent revenue windfall and called for deliberate reform to convert it into durable fiscal strength rather than a temporary gain. The meeting noted that gross FAAC have risen significantly over the past three years, driven by subsidy removal, exchange-rate unification and tax reform,” the statement added.
The meeting further highlighted changes introduced under the Nigeria Tax Act 2025, which took effect from January 1, 2026, and altered the distribution of VAT revenue among the tiers of government.
Under the new framework, the states’ share of VAT revenue increased from 50 per cent to 55 per cent, while the Federal Government’s share declined from 15 per cent to 10 per cent.
The new arrangement also provides that 30 per cent of the states’ VAT pool should be distributed according to the place of consumption rather than the location of a company’s registered headquarters.
The change is expected to create a stronger link between economic activity within a state and the revenue it receives from the Federation Account, potentially increasing competition among subnational governments to attract businesses and expand their economies.
The committee also reaffirmed its commitment to the full and timely remittance of collectable revenues by Ministries, Departments and Agencies into the Federation Account.
It stressed the need to diversify government revenues beyond crude oil and said solid minerals and other non-oil royalty streams would remain areas of focus as the federation seeks to build a more resilient revenue base.
The committee noted that sustaining the strong statutory revenue recorded in July would depend on improved collection and remittance discipline by revenue-generating agencies.
It added that the challenge for governments was no longer merely to share rising revenues but to ensure that the additional funds were converted into productive investments capable of strengthening public finances and improving living standards.
The meeting therefore urged the Federal Government and the states to use the current period of revenue growth to institutionalise reforms that would make federation allocations more predictable while building stronger foundations for long-term economic development.
Meanwhile, as the naira continues to strengthen, with the gap between the official and Bureau de Change rates narrowing to below two per cent, Nigeria’s foreign reserves stood above $52.5bn as of July 17, 2026, marking a 17-year high and surpassing the Central Bank of Nigeria’s annual target.
The feat was supported by sustained inflows and renewed investor confidence and participation across asset classes in Nigeria.
The Acting Director, Corporate Communications and Investor Relations Department at the CBN, Hakama Sidi-Ali, stated this on Tuesday in Lafia, the Nasarawa State capital, during a fair organised by the apex bank, with participants from various sectors of the state in attendance.
She explained that over the past 34 months, the Governor of the CBN, Olayemi Cardoso, had led bold reforms aimed at establishing the much-needed foundation for Nigeria’s next economic phase, promoting inclusive growth and job creation to alleviate poverty.
Sidi-Ali listed some of the reforms as the unification and greater transparency of the foreign exchange market and the successful recapitalisation of the banking sector, which, according to her, had fundamentally strengthened the resilience, capacity and competitiveness of the Nigerian banking industry.
Other reforms, she said, included the launch of the non-resident BVN to connect Nigerians abroad with local banking services, the B-MATCH System for forex trading, the unveiling of the Nigeria Payments System Vision 2028 and the introduction of a 75 per cent Cash Reserve Ratio on non-Treasury Single Account public sector deposits to enhance liquidity management and curb inflationary risks.
“The latest data from the National Bureau of Statistics indicate that headline inflation fell slightly from 15.91 per cent in June to 15.43 per cent in July 2026. Core and food inflation also eased over the same period, reflecting the effects of disciplined monetary tightening, exchange-rate unification, and improved market transparency,” she explained.
Speaking on the theme of the fair, “Driving Alternative Payment Channels as Tools for Financial Inclusion, Growth and Accelerated Economic Development,” the CBN acting director said it was carefully chosen to highlight the connections that drive critical activities towards achieving monetary, price and financial system stability, which she said were at the heart of the apex bank’s mandate.
According to her, the fair was one of the bank’s platforms strategically designed to engage the public on its policies and initiatives, with the objective of promoting sustainable economic growth and development across the country.
She also urged participants to uphold the cleanliness and respect of the naira, stressing that spraying, hawking, mutilating or counterfeiting the currency was prohibited.
She described the naira as an indispensable national emblem and a source of collective pride.
“Under the leadership of Mr Olayemi Cardoso, the Bank’s management remains strongly committed to maintaining monetary and price stability and to performing other essential functions of the Central Bank of Nigeria, as outlined in the CBN Act, 2007, as amended.
“These efforts are already yielding positive results, evidenced by the moderate decline in inflation, ongoing growth in our foreign reserves, and the current stability in the foreign exchange market,” she added.
Also speaking, the Branch Controller, CBN Lafia, Njideka Nwabukwu, said one of the key objectives of the fair was to enlighten the public about various initiatives of the Central Bank of Nigeria while providing a platform for valuable feedback to help the bank improve its service delivery and policy implementation.
She said the theme could not be more apt, as it underscored the CBN’s commitment to leveraging innovation and technology to bring more Nigerians into the formal financial system and stimulate sustainable economic growth.
Nwabukwu said the bank had recorded notable milestones in deepening financial inclusion through alternative payment channels, including the expansion of agent banking and Point-of-Sale networks nationwide, as well as the promotion of mobile money, QR payments, internet banking and instant payment platforms.
She said the initiatives had significantly improved access to financial services for millions of Nigerians.
“Today, I therefore urge every participant here to become an ambassador of financial inclusion. I encourage our entrepreneurs and traders to embrace digital payment solutions in their daily transactions.
“I encourage our youths to leverage technology responsibly to create value and opportunities. I encourage financial institutions and payment service providers to continue innovating while maintaining the highest standards of customer protection and service delivery.
“Together, we can reduce reliance on cash, improve efficiency, expand economic opportunities, and unlock the immense potential of our local and national economy,” she said.
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