“Where is the Money?”: FAAC Shares N1.97trn After Tense Standoff Over Salaries Delays

ABUJA — The tension that gripped the nation’s civil service has finally broken. After a week-long standoff that delayed January salaries for thousands of workers, the Federation Account Allocation Committee (FAAC) has officially disbursed a massive N1.969 trillion to the three tiers of government.

The breakthrough, confirmed on Monday by the Office of the Accountant-General of the Federation (OAGF), comes after state finance commissioners reportedly rejected the initial figures, demanding a more transparent accounting of December’s windfall.

The eventual disbursement reveals a shocking financial lifeline: while statutory revenue dipped, a record-breaking spike in Value Added Tax (VAT) effectively saved the month for the 36 state governors.

The Breakdown: Who Got What?

From the total distributable revenue of N1.969 trillion (generated in December 2025):

• The Federal Government pocketed N653.5 billion, retaining the lion’s share despite growing calls for fiscal federalism.
• State Governments received a combined N706.47 billion, a critical injection needed to clear the backlog of the new minimum wage arrears.
• Local Government Councils got N513.27 billion, continuing their recent run of improved liquidity.
• Oil Producing States shared an additional N96.08 billion as 13% derivation revenue.

The “VAT Miracle”

The most striking revelation from the FAAC communique is the explosive growth in consumption tax.

• The Surge: VAT revenue skyrocketed to N913.9 billion in December, a staggering increase of N350.9 billion from the N563 billion recorded in November.
• The Savior: This surge compensated for a significant drop in statutory revenue (down by N105 billion), proving that the Federal Inland Revenue Service’s (FIRS) aggressive digital tracking is biting hard on businesses—but paying off for the government.

The Standoff Explained

Why the delay? Sources close to the meeting revealed that state commissioners initially refused to sign off on the accounts last week. “The figures didn’t add up initially,” a source told nuus.ng. “Governors are under immense pressure to pay the new wage. They suspected that some revenue points were being ‘saved’ by the Federal Government. They refused to leave Abuja until everything was put on the table.”

Impact on Workers

With the funds now released, the Nigeria Labour Congress (NLC) has issued a warning to state governors. “The money is in their accounts now,” an NLC spokesperson stated in Abuja. “There is no excuse for any worker to be owed January salaries by Wednesday. We are watching.”

As the alerts begin to drop, the relief is palpable, but the question remains: Can the government sustain this N1.9 trillion monthly benchmark without breaking the back of the tax-paying businesses fueling the VAT surge?