FAAC: States’ Rejection of N1.9tn Stalls January Revenue Distribution

The distribution of January federation revenue has been delayed following a disagreement between state governments and the Federal Government over the proposed sum of N1.9 trillion to be shared among the three tiers of government.

Findings indicate that the impasse, which has persisted for about two weeks, arose during meetings of the Federation Account Allocation Committee (FAAC), where representatives of the states reportedly rejected the figure presented for distribution. The states are said to be contesting the composition and size of the distributable revenue, raising concerns over deductions, revenue inflows, and the impact of ongoing fiscal adjustments.

FAAC, which comprises commissioners of finance from the 36 states, officials of the Federal Ministry of Finance, the Office of the Accountant-General of the Federation, and other key agencies, is statutorily responsible for the monthly sharing of revenues accrued to the Federation Account. Any lack of consensus among members typically results in a postponement of disbursement.

The delay has heightened anxiety among state governments, many of which rely heavily on monthly FAAC allocations to meet recurrent obligations such as salary payments, debt servicing, and ongoing projects. Local governments are also affected, as their allocations are drawn from the same pool.

As of the time of filing this report, discussions were said to be ongoing to resolve the differences and agree on an acceptable distributable sum. Officials familiar with the talks expressed optimism that a compromise could be reached, allowing the January allocation to be released, though no definite timeline has been announced.