Nigeria’s Federal Ministry of Finance has dismissed claims of hidden spending and diversion of federation revenue, describing recent interpretations of the World Bank Nigeria Development Update as misleading and inaccurate.
In a statement issued on Sunday, the Honourable Minister of State for Finance, Taiwo Oyedele, said some reports misrepresented the findings of the international financial institution and reflected a misunderstanding of Nigeria’s fiscal system.
The ministry specifically addressed claims surrounding deductions made by the Federation Account Allocation Committee (FAAC), noting that such deductions had been wrongly portrayed in some media commentaries as wasteful spending or missing funds.
According to the statement, FAAC deductions cover statutory transfers, savings and investments, security-related expenditures, cost-of-collection charges, refunds to Ministries, Departments and Agencies (MDAs), as well as transfers and interventions that benefit state and local governments.
The ministry emphasised that refunds and allocations to states and other tiers of government are legitimate fiscal transactions and should not be interpreted as revenue leakages.
It also criticised what it described as the selective use of outdated data in certain commentaries, saying such interpretations overlooked recent reforms and forward-looking analysis contained in the World Bank report.
The ministry pointed out that reforms introduced in early 2026, including a newly signed Executive Order aimed at safeguarding the remittance of petroleum revenues, are already addressing concerns about deductions from the federation account.
According to the statement, the measures are expected to enhance transparency and increase revenues available to all tiers of government by about 0.4 per cent of Gross Domestic Product annually.
Highlighting broader economic trends, the ministry said the World Bank report presented a positive outlook for Nigeria’s economy, with growth becoming more broad-based across sectors.
It noted that inflation, though still elevated, is gradually declining due to deliberate policy measures, while Nigeria’s external position has improved, supported by stronger foreign reserves and a current account surplus.
The statement further indicated that debt indicators have also improved, including a decline in the country’s debt-to-GDP ratio for the first time in more than a decade.
The ministry stressed that the World Bank did not conclude that Nigeria’s fiscal system is failing but rather acknowledged that ongoing reforms are yielding results and should be sustained.
It reaffirmed the Federal Government’s commitment to strengthening fiscal transparency, improving revenue mobilisation, ensuring efficient public spending, and deepening reforms aimed at supporting inclusive economic growth.
The ministry also urged stakeholders, media organisations, and the public to engage responsibly with fiscal information to avoid misinterpretations that could undermine ongoing reforms and public confidence.
