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Labour knocks govt as FAAC payouts hit N10.4tn

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Nigeria’s three tiers of government received a total of N10.45tn from the Federation Account Allocation Committee (FAAC) between January and May 2026, representing a 25.85 per cent increase from the N8.30tn shared in the corresponding period of 2025, as the Nigeria Labour Congress and private sector stakeholders criticised governments at all levels over worsening living conditions, infrastructure decay and rising insecurity.

An analysis by The PUNCH showed that the allocations to the Federal Government, 36 states, the Federal Capital Territory, and 774 Local Government Areas were distributed from the gross government revenue of N13.76tn realised during the period, up by 4.32 per cent from N13.19tn recorded in the first five months of 2025.

The increase in distributable revenue occurred amid stronger Value Added Tax collections, higher oil-related tax receipts, and an aggressive drive by the Nigeria Revenue Service to achieve its revenue target of approximately N40tn for the federation.

Analysis of FAAC data in 2026 showed that the Federal Government received N3.72tn from the five-month allocation, while state governments got N3.56tn. Local governments received N2.51tn, while the 13 oil-producing states shared N673.17bn as derivation revenue.

A breakdown of monthly allocations showed that the amount shared rose from N1.96tn in January 2026 to N2.30tn in May 2026.

Month-on-month, allocations declined by 3.37 per cent in February to N1.89tn, then rebounded by 7.50 per cent to N2.04tn in March. The distributable pool increased further by 10.85 per cent in April to N2.26tn and rose by another 1.91 per cent in May to N2.30tn.

Compared with the corresponding months of 2025, January 2026 allocation increased by 15.09 per cent from N1.70tn to N1.96tn. February rose by 12.87 per cent from N1.68tn to N1.89tn, while March jumped by 28.86 per cent from N1.58tn to N2.04tn.

April recorded a 34.35 per cent increase from N1.68tn to N2.26tn, while May rose by 38.55 per cent from N1.66tn to N2.30tn, indicating stronger revenue mobilisation as the year progressed.

Gross government revenue also climbed steadily. It stood at N2.59tn in January, declined to N2.23tn in February, before rising to N2.36tn in March, N3.18tn in April, and N3.40tn in May.

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The Federal Government emerged as the largest beneficiary of the five-month allocation with N3.72tn, exceeding the total allocation to local governments by N1.21tn or 48.2 per cent. State governments received N3.56tn, which was N1.05tn or 41.8 per cent higher than the N2.51tn allocated to local councils.

The gap between the Federal Government and states remained relatively narrow, with the Federal Government receiving N160.71bn more than states during the period, representing about 4.5 per cent.

Labour reacts

In a phone interview with The PUNCH, reacting to the development, the Assistant General Secretary of the Nigeria Labour Congress, Chris Onyeka, said the increase in revenue had not translated into improved welfare for Nigerians.

“It is not the quantum of revenue available to the government that translates to impact on the welfare of citizens and workers,” Onyeka said. “It is the willingness of the people who occupy positions of leadership that determines how these resources impact the lives of the citizenry.”

He accused the three tiers of government of failing to channel public resources into projects that improve citizens’ lives.

He lamented the political problem, stating: “The answer is simply that 99 per cent of those in government will not let it impact positively on the lives of Nigerians. Because if they do, our lives will not be the way they are. Infrastructure all over the nation has deteriorated significantly.”

However, some states are performing above board. According to the NLC official, “It is only in one or two states where you see improvement because the people occupying positions of leadership have decided to allow some of the resources to touch the lives of the people.”

The labour leader argued that insecurity remained the biggest indicator of government failure despite rising revenues. “You cannot talk about infrastructure development or the welfare of the citizenry if you cannot address insecurity. If I cannot move from point A to point B without having my heart in my mouth, then you cannot talk about any other thing. The Constitution talks about the security and welfare of citizens. Security is paramount,” Onyeka said.

He added, “If I cannot go to my farm and come back safely, if I plant and cannot return to harvest, then it has multiplier effects on the welfare of the citizenry. Nigerians are scared. As you are saving money, you are also saving money for ransom payments.”

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Onyeka lamented that workers had not benefited from the increased allocations, citing soaring transportation, housing and food costs.

“We do not feel better off. We do not use better roads. We do not pay cheaper transport fares. We do not have better access to health care, education or nutrition. We cannot feed ourselves better. So how do you measure the impact?” he asked.

He further declared, “Nigeria is not working. Nigeria is not working.”

Also commenting, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, said some states had used increased revenues to support citizens, but many had failed to prioritise projects that directly improve livelihoods.

“Some states have invested in projects that really impact the lives of the people, such as providing mass transit, supporting farmers with fertiliser and inputs, investing in health care services and developing rural communities,” Yusuf said.

However, he noted that many governments focused on projects with limited impact on living standards. “Many states prefer to embark on physical projects people can see, like express roads, flyovers and airports. Those things are not bad, but their developmental impacts in terms of livelihoods and living standards are very limited,” Yusuf stated.

He warned against a situation where rising government revenues coexist with worsening poverty. “States should focus on things that directly impact livelihoods and welfare so that we do not have a situation where there is prosperity in terms of revenue and fiscal outcomes while so many people are left behind. Inclusion is very critical,” Yusuf said.

The economist also urged state governments to take greater responsibility for security, saying they should continue supporting security agencies rather than leaving the burden solely to the Federal Government.

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New sharing formula

The growth in allocations comes months after the implementation of a new VAT sharing formula under the tax reforms signed into law by President Bola Tinubu. The reforms reduced the Federal Government’s VAT share from 15 per cent to 10 per cent while increasing the states’ share from 50 per cent to 55 per cent.

The PUNCH had earlier reported that states received N1.18tn from VAT revenue in the first quarter of 2026, an increase of N214.78bn or 22.35 per cent compared to the corresponding period of 2025.

The Federal Capital Territory also made history in January 2026 when it received N15.8bn from the VAT pool for the first time despite being a consistent contributor to VAT collections.

However, despite the improvement in allocations, revenue generation has remained below government expectations. The PUNCH previously reported that the Nigeria Revenue Service generated N7.44tn in the first quarter of 2026 against a target of N9.68tn, leaving a shortfall of N2.24tn and achieving a performance rate of 76.87 per cent.

The NRS has since intensified compliance enforcement. Speaking recently at a tax compliance workshop in Abuja, Executive Director of the Government and Large Taxpayer Directorate, Amina Ado, warned that unremitted taxes by ministries, departments, agencies, states and local governments could trigger direct deductions from their FAAC allocations.

Ado said, “Section 80 empowers the Accountant General of the Federation to deduct all unremitted revenues due from any MDA or government from its budgetary allocation and remit such deductions to the relevant tax authority, whether a federal or a state tax authority, after a specific due process has been followed.”

She added, “If a federal, state, or local government treats that withholding tax as someone else’s responsibility, the law provides a mechanism for that neglect to return immediately through deductions from allocations by the Accountant General of the Federation.”

According to her, the agency is targeting about N40tn in tax revenue and sees stronger compliance by public institutions as critical to achieving the goal.

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Banks deposit N4.15trn with CBN as excess liquidity persists

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NIGERIA’S banking sector deposited a total of N4.15 trillion with the Central Bank of Nigeria (CBN) through the Standing Deposit Facility (SDF) during the week, highlighting persistent excess liquidity in the financial system, despite ongoing monetary tightening measures.

Market data showed that deposits at the SDF surged by nearly 60 percent from N2.60 trillion recorded in the previous week. In contrast, borrowing through the CBN’s Standing Lending Facility (SLF) remained marginal at N36.10 billion, indicating that banks faced little pressure in meeting short-term funding needs.

The liquidity glut was largely driven by substantial inflows from maturing Open Market Operation (OMO) bills valued at N2.21 trillion and Treasury bills maturities amounting to N269.36 billion. Although the settlement of N1.06 trillion from the Debt Management Office’s Treasury bills auction moderated system liquidity towards the end of the week, banking system balances remained firmly positive, closing at N4.32 trillion.

The improved liquidity environment pushed down interbank funding rates across key tenors. Overnight Nigerian Interbank Offered Rate (NIBOR) declined by 10 basis points to 22.19 percent while the one-month, three-month and six-month rates fell by 24 basis points, 38 basis points and 39 basis points to 22.35 percent, 22.56 percent and 22.83 percent, respectively.

Analysts said the decline in interbank rates reflected reduced demand for short-term funds among banks amid ample liquidity conditions.

In the fixed-income market, the Nigerian Treasury Bills True Yield (NITTY) curve recorded mixed movements. While yields on the one-month and 12-month instruments rose slightly to 16.46 percent and 21.05 percent, respectively, yields on the three-month and six-month tenors declined to 16.78 percent and 18.01 percent, reflecting stronger investor demand for medium-term government securities.

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The secondary Treasury bills market also maintained a bullish tone as investors continued to seek attractive sovereign instruments. Demand across short-, medium- and long-dated maturities drove the average Treasury bill yield down by 22 basis points to 18.51 percent from 18.73 percent in the previous week.

The latest figures extend a trend seen in recent weeks. In the third week of June, excess liquidity in the banking system surged by 37 percent, with banks’ placements at the CBN’s deposit window rising above N5 trillion as lenders parked surplus funds amid limited lending opportunities and the absence of aggressive liquidity mop-up operations by the apex bank.

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Nigerians now hold $59bn in Cryptocurrency assets —FDC

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NIGERIANS have accumulated an estimated $59 billion in cryptocurrency holdings, according to data released by Financial Derivatives Company (FDC) Limited during its July breakfast session. The figure highlights the country’s emergence as one of Africa’s and the world’s major players in digital assets.

This is just as BTC declined 0.92 percent in 24 hours to $59,368.

The earlier disclosure reflects a profound shift in Nigeria’s financial landscape. In Africa’s largest economy, crypto has moved from a fringe activity to a mainstream tool amid persistent inflation and naira volatility. Citizens and businesses are increasingly turning to dollar-pegged stablecoins and decentralised platforms, building a parallel financial system with significant economic influence.

Nigeria continues to rank among global leaders in adoption. According to Chainalysis’ 2024 Global Crypto Adoption Index, the country placed second worldwide for grassroots adoption, driven by widespread use in everyday transactions and cross-border commerce.

Despite these impressive statistics, a notable contradiction remains in public perception. While stocks, real estate, mutual funds, and foreign currency are openly discussed, many Nigerians still approach cryptocurrency with caution, often downplaying their involvement. Observers note that this hesitation stems more from perception than actual adoption levels.

Bitcoin (BTC), the leading cryptocurrency, traded at $59,368 after declining 0.92 percent in 24 hours, underperforming a softer broader market. The drop was driven by strong correlation to sell-offs in traditional tech stocks and persistent institutional outflows. U.S. spot Bitcoin ETFs recorded nearly $1.8 billion in net outflows last week, stripping away key support.

Analysts say Bitcoin is acting as a high-beta risk asset, mirroring rotations out of technology and semiconductor stocks rather than crypto-native catalysts. Aggregate open interest rose 5.11 percent while BTC trades below its 7-day simple moving average of $60,430 with an RSI of 34, signalling oversold conditions. A reclaim of $60,430 or a break below the $58,035 swing low will be critical in the near term.

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In a parallel development, Bitcoin experienced a sharp decline in millionaire addresses during the first half of 2026. According to Finbold’s H1 2026 Cryptocurrency Market Report, addresses holding at least $1 million fell from 148,084 to 121,431 — a loss of 26,653 addresses or 18%. This came as BTC’s price dropped approximately 34.2% from $88,700 to $58,315. The largest decline was in the $1–10 million bracket.

Jordan Major, Chief Editor at Finbold, said: “The data shows how quickly Bitcoin’s on-chain wealth distribution can shift when prices fall. This does not necessarily point to widespread selling, but rather a price-driven reclassification of wallets.”

On the regulatory front, Nigeria’s Securities and Exchange Commission (SEC) on July 2 approved seven additional digital asset and fintech companies for its regulatory sandbox under the Accelerated Regulatory Incubation Programme (ARIP). The firms granted Approval-in-Principle are Bitbarter Technologies, Luno Fintech Nigeria, GetEquity, Koinkoin Global Network, Wrapped CBDC, Trovotech, and Blockvault Custodian.

These conditional approvals, which do not constitute full licences, signal a gradual formalisation of the sector as authorities balance innovation with oversight.

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Nigeria’s oil output hits 74-month high, beats OPEC quota

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Nigeria’s crude oil production has climbed to its highest level in more than six years, with the country exceeding its Organisation of the Petroleum Exporting Countries production quota for the fourth consecutive month, buoyed by improved operational stability and fewer disruptions to oil infrastructure.

Latest figures released on Sunday in Abuja by the Nigerian Upstream Petroleum Regulatory Commission showed that the country’s average crude oil production rose to 1.56 million barrels per day in June 2026, while condensate output stood at 0.18 million barrels per day, bringing total crude oil and condensate production to 1,735,398 barrels per day.

The production level represents 104 per cent of Nigeria’s 1.5 million barrels per day crude oil production quota approved by OPEC and marks the country’s highest crude oil output since April 2020, making it a 74-month high.

The figures, contained in the commission’s latest production report and conveyed in a statement issued by its Head of Media and Corporate Communications, Eniola Akinkuotu, showed that June also marked the fourth consecutive month of production growth, reinforcing the recovery of Nigeria’s upstream oil sector after years of production losses caused by crude theft, pipeline vandalism and operational disruptions.

The statement read, “Nigeria’s crude oil and condensate production soared to an average of 1,735,398 barrels per day in the month of June 2026, representing positive growth for a 4th consecutive month. In the month under review, crude oil production hit 1.56mbpd while 0.18mbpd of condensates was produced. This means Nigeria met 104 per cent of the 1.5mbpd crude oil production quota set by the Organisation of Petroleum Exporting Countries.”

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According to the commission, total crude oil and condensate production increased from 1.700 million barrels per day recorded in May to 1.735 million barrels per day in June, representing a 2.2 per cent month-on-month increase.

The report showed that combined production had earlier stood at 1.483 million barrels per day in February before rising steadily to 1.564 million barrels per day in March, 1.663 million barrels per day in April, 1.701 million barrels per day in May, and 1.735 million barrels per day in June.

The NUPRC attributed the improved performance to stable production activities across major oil-producing assets and the absence of significant pipeline outages during the review period.

“The improved performance was primarily driven by stable production operations across most producing assets and the absence of any major pipeline outages during the period under review.

“This enhanced operational stability supported improved production uptime and crude evacuation efficiency. Although a limited number of assets experienced short-duration operational shutdowns, the overall impact on national production was minimal.

“In addition, scheduled turnaround maintenance activities were effectively managed and completed without significant disruption to production operations.

“The sustained growth recorded in June reflects the continued commitment of operators and industry stakeholders towards improving operational efficiency, maintaining asset integrity, and enhancing production reliability across the Nigerian upstream petroleum sector,” the statement added.

The commission also disclosed that Nigeria’s highest daily combined crude oil and condensate production during the month reached 1.89 million barrels per day, while the lowest daily production stood at 1.57 million barrels per day.

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The peak production level underscores Nigeria’s growing potential to achieve the Federal Government’s medium-term ambition of producing two million barrels of oil per day, a target that has remained elusive for years due to insecurity in oil-producing communities, crude theft and ageing infrastructure.

An analysis of production by export terminals showed that Bonny Terminal retained its position as Nigeria’s highest-producing terminal, recording an average daily production of 318,280 barrels, compared with 293,880 barrels in May.

Forcados Terminal ranked second with 306,360 barrels per day, up from 289,900 barrels recorded in the previous month.

However, production at Qua Iboe Terminal declined to 164,730 barrels per day from 173,360 barrels per day in May.

Similarly, Escravos Terminal recorded a slight increase to 138,030 barrels per day, compared with 135,470 barrels per day in the previous month, while Bonga Terminal maintained steady output, producing 103,660 barrels per day, slightly above the 102,540 barrels per day recorded in May.

The sustained production growth is expected to strengthen Nigeria’s oil export earnings, improve foreign exchange inflows and provide additional fiscal revenues for the Federal Government at a time authorities are seeking to increase crude output and attract fresh investment into the upstream sector.

Nigeria has struggled in recent years to meet its OPEC production allocation because of widespread crude oil theft, pipeline vandalism, underinvestment, and prolonged operational challenges. However, reforms introduced under the Petroleum Industry Act, enhanced security around critical oil infrastructure, and closer collaboration between government agencies and oil producers have contributed to the gradual recovery in production.

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Maintaining production above the OPEC quota and sustaining operational stability will be critical if Nigeria is to realise its target of producing two million barrels per day and maximise the benefits of favourable global oil market conditions.

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