The Federal Government has rejected allegations of hidden spending and diversion of federation revenue, insisting that recent interpretations of the World Bank’s Nigeria Development Update misrepresent the country’s fiscal realities.
In a statement issued in Abuja, the Minister of State for Finance, Taiwo Oyedele, described reports suggesting large-scale diversion of public funds as inaccurate, attributing them to a misunderstanding of Nigeria’s fiscal structure.
Oyedele clarified that deductions made by the Federation Account Allocation Committee (FAAC), which some commentaries had portrayed as missing or wasted funds, are in fact statutory and essential components of public finance administration.
He explained that these deductions cover a range of legitimate obligations, including statutory transfers, security-related expenditures, savings and investments, cost-of-collection charges, as well as refunds to Ministries, Departments and Agencies (MDAs). They also include transfers and interventions that directly benefit states and other subnational entities.
According to the minister, categorising such allocations—particularly refunds and transfers to states—as “leakages” is misleading, noting that they represent lawful disbursements backed by existing fiscal laws and obligations.
The government also raised concerns over what it described as the selective use of outdated data in some analyses. Oyedele stressed that the World Bank report itself acknowledged ongoing reforms targeted at improving transparency and strengthening revenue generation.
He highlighted measures introduced in early 2026, including a new Executive Order aimed at ensuring the full remittance of petroleum revenues. The policy, he said, is expected to boost government earnings across all tiers by approximately 0.4 percent of Gross Domestic Product annually.
Providing a broader perspective, the minister noted that Nigeria’s economic outlook is showing signs of recovery, with growth becoming more diversified across sectors, inflation gradually easing, and external reserves improving alongside a current account surplus.
He further pointed to improvements in key debt indicators, including a decline in the debt-to-GDP ratio for the first time in over a decade.
“The World Bank does not conclude that Nigeria’s fiscal system is failing,” the statement noted. “Rather, it recognises that current reforms are yielding results and should be sustained to achieve inclusive economic growth.”
The Federal Government reaffirmed its commitment to fiscal transparency, enhanced revenue mobilisation, and prudent public spending, while urging media organisations and stakeholders to engage responsibly with economic data to avoid misinterpretations that could erode public confidence.
