Security: FG Creates N500bn Emergency Fund

Citing multiples sources, the newspaper said the deduction was made before the monthly revenue sharing exercise among the Federal Government, states and local government councils, according to senior officials privy to the FAAC proceedings.

Confirming the development, one of the sources said, “FAAC deducted N500bn for national security emergency fund this month.”

Another official added that the deduction accounted for a significant portion of the gap between the total revenue generated and the amount eventually distributed to the three tiers of government.

“That is where the FAAC windfall is going too,” the source said.

He further disclosed that commissioners of finance from the 36 states, who are members of the FAAC, were aware of the deduction.

“Commissioners are not talking about it, which means they are in the loop,” the official added.

However, an official FAAC allocation document obtained by The PUNCH on Thursday showed that substantial deductions from federation revenues were disclosed during the May 2026 FAAC meetings.

The document indicated that N250bn was set aside for a Military Intervention Fund, while another N252bn was allocated as an Infrastructure Development Fund to states.

It also showed a N450bn deduction to the Non-Oil Excess Revenue Account, bringing the combined value of the three major deductions to N952bn.

The revelation comes as the Federation Account Allocation Committee announced the distribution of N2.3tn to the Federal Government, state governments and the 774 local government councils as revenue allocation for May 2026.

According to 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, the Federation Account Allocation Committee shared N2.30tn among the Federal Government, states and local government councils from May 2026 revenue, representing an increase of N43bn from the N2.26tn distributed in the previous month.

The allocation marks a 1.9 per cent month-on-month increase and continues the upward trend in federation revenues. The N2.257tn shared from April 2026 revenue had itself exceeded the N2.04tn distributed for March revenue by N217bn, while the March allocation was N150bn higher than the N1.89tn shared in February.

The statement said the N2.300tn distributable revenue comprised N1.611tn in statutory revenue and N688.785bn in Value Added Tax revenue.

A communiqué issued after the meeting showed that total gross revenue available in May stood at N3.395tn. From this amount, N123.546bn was deducted as the cost of collection, while N971.610bn was set aside for transfers and refunds.

A breakdown of the N2.300tn distributable revenue showed that the Federal Government received N818.680bn, while state governments received N759.141bn.

The 774 local government councils received N534.277bn, while oil-producing states shared N188.132bn as 13 per cent derivation revenue.

Although the official FAAC communiqué did not provide details of the individual items captured under transfers and refunds, sources said the N500bn security deduction formed part of the pre-distribution adjustments made to the federation revenue for the month.

The deduction comes against the backdrop of persistent security challenges across Nigeria, with federal and state governments facing mounting pressure to strengthen military and intelligence operations.

In recent years, the country has grappled with multiple security threats, including insurgency in the North-East, banditry and mass kidnappings in the North-West, violent clashes between farmers and herders in the North-Central, separatist agitations in the South-East and crude oil theft and pipeline vandalism in the Niger Delta.

Despite billions of naira budgeted annually for defence and security, attacks on communities, abductions for ransom and assaults on security formations have continued to stretch the country’s security architecture.