The Federal Government has set aside about N500bn from the Federation Account Allocation Committee revenue for May 2026 to fund a national security emergency intervention before the monthly revenue-sharing exercise, according to multiple sources familiar with the process.
The Punch reported that senior officials with knowledge of the FAAC proceedings disclosed that the deduction was made before allocations were distributed to the Federal Government, states and local government councils.
Confirming the development, one of the sources said, “FAAC deducted N500bn for national security emergency fund this month.”
Another official explained that the deduction contributed significantly to the difference between total federation revenue and the amount eventually shared among the three tiers of government.
“That is where the FAAC windfall is going too,” the source said.
The official further stated that state commissioners of finance, who are members of FAAC, were aware of the deduction.
“Commissioners are not talking about it, which means they are in the loop,” the official added.
Documents obtained from the May 2026 FAAC meeting, however, showed that major deductions were made from federation revenues before distribution.
The records revealed that N250bn was earmarked for a Military Intervention Fund, while another N252bn was allocated to states under an Infrastructure Development Fund.
The document also showed that N450bn was transferred to the Non-Oil Excess Revenue Account, bringing the total value of the three major deductions to N952bn.
The disclosure followed FAAC’s announcement of a N2.3tn revenue allocation to the Federal Government, the 36 states and the 774 local government councils for May 2026.
In a statement issued on Wednesday by the Director of Press and Public Relations in the Office of the Auditor-General of the Federation, Bawa Mokwa, FAAC said the N2.30tn distributed for May represented an increase of N43bn from the N2.26tn shared in April.
The allocation reflected a 1.9 per cent rise month-on-month and continued the upward trend in federation revenues. The N2.257tn distributed from April revenue exceeded the N2.04tn shared in March by N217bn, while the March allocation was N150bn higher than the N1.89tn distributed in February.
According to the statement, the distributable revenue consisted of N1.611tn from statutory sources and N688.785bn from Value Added Tax collections.
A communiqué issued after the FAAC meeting showed that total gross revenue available in May stood at N3.395tn. From the amount, N123.546bn was deducted as cost of collection, while N971.610bn was reserved for transfers and refunds.
Of the N2.300tn distributed, the Federal Government received N818.680bn, states got N759.141bn, and local government councils shared N534.277bn. Oil-producing states received N188.132bn as 13 per cent derivation revenue.
Although the communiqué did not specify the items captured under transfers and refunds, sources said the N500bn security allocation formed part of the deductions made before revenue sharing.
The move comes amid persistent security challenges across the country, including insurgency in the North-East, banditry and kidnappings in the North-West, farmer-herder conflicts in the North-Central, separatist agitations in the South-East and crude oil theft in the Niger Delta.
Despite significant annual allocations to defence and security, attacks on communities, abductions for ransom and assaults on security personnel have continued to test the country’s security architecture.
President Bola Tinubu’s administration has consistently maintained that security remains a key condition for economic growth and social stability.
Since taking office in May 2023, the government has increased funding for the armed forces, acquired military equipment and intensified intelligence-driven operations against insurgency and other violent crimes.
Economists who spoke with The PUNCH welcomed the proposed security fund but stressed the need for transparency and accountability in its management.
The Chief Executive Officer of Economic Associates, Dr Ayo Teriba, said the country’s security funding gaps were evident and required urgent attention.
“Everybody agreed that not enough is being done on security, not enough is being spent on security, and the funding gaps on security are obvious,” Teriba said.
He noted that sourcing the fund from FAAC allocations rather than imposing fresh taxes on citizens would likely gain public support, provided the process remained transparent.
“If the government wants to set aside a security fund, nobody will be opposed to it. They are saying they will take it from FAAC before sharing the money. If they want to sacrifice money that they need for security, that is the only way,” Teriba said.
He added, “It is up to them to reassure Nigerians that this time they mean well and that they can be transparent about what they want to use this funding for.”
Teriba also supported the opposition of the Department of State Services to foreign contributions to the proposed trust fund.
“I am happy that the DSS is saying no foreign funding because some of the insurgents are being funded by some foreign interests. Some foreign countries might be complicit, and you shouldn’t take funding from such,” Teriba said.
Also speaking, Professor of Economics and Public Policy at the University of Uyo, Prof. Akpan Ekpo, emphasised that security was fundamental to attracting investments and driving development.
“Security is very crucial. Without security, all the investments coming in will not work. With security, you can develop a place. Without security, you can’t,” Ekpo stressed.
He described the proposed emergency fund as a positive step, provided the resources were used judiciously.
“If you have an emergency fund to boost security, to get modern equipment and fight insurgency and terrorism, it is a step in the right direction, provided the money is used efficiently, and there is transparency,” Ekpo said.
However, he questioned the effectiveness of previous security expenditures, warning that poor accountability could weaken public confidence in the initiative.
