State governors have rejected deductions from allocations due to the states from the Federation Account in the September 2026 revenue-sharing cycle, arguing that the deductions would further squeeze their finances, The PUNCH reports.
The states also called for the suspension of deductions linked to the Paris Club refund to local government councils, alleging that the payments were resumed without prior communication and reconciliation with affected states.
Their opposition comes after the three tiers of government shared N668.4bn less of August 2026 revenue distributed in September, heightening concerns over the impact of lower revenue receipts on states’ ability to meet their financial obligations.
The governors also demanded the redistribution of the proposed N240bn savings, insisting that the funds should be shared among the federal, state and local governments rather than deducted or retained under the proposed arrangement.
The complaints were raised by several state Accountants-General during the technical session of the Federation Account Allocation Committee meeting, according to a report by the committee’s technical sub-committee, dated 14 October, 2026, obtained by The PUNCH on Thursday.
The meeting, held at the Federal Ministry of Finance headquarters in Abuja, considered revenue accounts for August and the amounts available for distribution in September.
The report showed that the total amount recommended for distribution to the federal, state and local governments stood at N2.339tn, compared with N3.007tn shared in the previous month, representing a decline of N668.4bn.
The statutory revenue available for distribution dropped more sharply, falling from N2.283tn in the previous month to N1.566tn in August, a decrease of N717.08bn.
However, revenue from Value Added Tax increased to N773.23bn from N724.46bn, providing some relief amid the decline in statutory revenue.
The Director of the Federation Account Department, Okolie Rita, who presented the accounts, told the committee that the statutory revenue available for distribution was calculated after deducting N85.71bn and N36.83bn as four per cent costs of collection for the Nigeria Revenue Service and the Nigerian Upstream Petroleum Regulatory Commission, respectively.
The revenue decline triggered calls from state representatives for the Federal Government to release additional funds and reconsider deductions that they said were putting pressure on state finances.
The Accountant-General of Akwa Ibom State, Andrew Essien, observed that August revenue had dropped considerably compared with July and appealed for the proposed N240bn savings to be returned to the distributable pool.
The Accountant-General of Jigawa State, Abdullahi Shehu, recalled an earlier proposal to augment the previous month’s revenue with N250bn, which he said had not been implemented. He urged the committee to combine the promised N250bn with the proposed N240bn savings and redistribute the funds to the three tiers of government.
The Accountant-General of Bayelsa State, Tokoni Ifidi, supported the demands and raised concerns about deductions for the Paris Club refund to local government councils.
She said the deductions were introduced without prior communication to the states, despite what she described as an earlier commitment in 2025 concerning the deductions, which began in February that year and were stopped by a court order in April 2026.
The document read, “AG Akwa Ibom observed a considerable drop in the revenue of August, 2026 compared to July, 2026 and appealed for the proposed savings of N240bn to, instead, be redistributed. AG Jigawa recalled that there was a proposal to augment the previous month’s revenue with the sum of N250bn but it had not been done. He suggested that the N250bn promised in the previous month should be added to the proposed savings of N240bn and be redistributed.”
The Director of the Federation Account Department explained that the Paris Club deductions were not new, noting that they had previously been suspended following a court order.
The Bayelsa representative, however, maintained that the deductions should continue to be suspended pending reconciliation. She said the Economic and Financial Crimes Commission had held reconciliation sessions with local government councils and was awaiting feedback from the Office of the Accountant-General of the Federation on the commencement and continuation of the deductions.
The Accountant-General of Niger State, Saidu Abdullahi, criticised the handling of the deductions, arguing that the ministry had made a mistake from the beginning by distributing funds without adequate planning and proper communication.
He insisted that previous agreements should be honoured, particularly the proposed N250bn augmentation, while supporting calls for the redistribution of the N240bn savings.
The Accountant-General of Cross River State, Glory Effiong, also backed the demand for the savings to be redistributed, observing that deductions had consumed a substantial portion of the earnings of many states.
She said she had not been invited to any reconciliation meeting on the Paris Club debt since joining the committee and urged the Office of the Accountant-General of the Federation to improve its communication with state representatives.
The Accountant-General of Jigawa State further questioned the amount deducted under security-related expenditure, describing the quantum of deductions as alarming and calling for a review.
The Accountant-General of Nasarawa State, Musa Mohammed, stressed that states should be properly informed and invited to reconciliation meetings before decisions affecting their allocations were implemented.