ABUJA — The Federal Government has dismissed claims of hidden spending and diversion of federation revenue, describing such reports as a misrepresentation of findings contained in the latest Nigeria Development Update by the World Bank.
In a statement issued in Abuja on Sunday, the Minister of State for Finance, Taiwo Oyedele, said recent media interpretations suggesting that a significant portion of federation earnings was being diverted were inaccurate and based on a misunderstanding of Nigeria’s fiscal framework.
Oyedele clarified that deductions by the Federation Account Allocation Committee (FAAC), which had been portrayed in some reports as wasteful or missing funds, were legitimate and statutory components of public finance administration.
He explained that such deductions include 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 benefiting subnational governments.
According to him, refunds and transfers to states and other tiers of government should not be classified as leakages, noting that they represent lawful fiscal flows, including repayments of obligations and allocations backed by law.
The minister also faulted what he described as the selective use of outdated data in some commentaries, stressing that the World Bank report acknowledged ongoing reforms aimed at improving transparency and boosting revenue.
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He pointed out that reforms introduced in early 2026, including a new Executive Order designed to safeguard the remittance of petroleum revenues, were already addressing concerns around deductions and are projected to increase revenues available to all tiers of government by about 0.4 per cent of Gross Domestic Product annually.
Highlighting the broader outlook of the report, Oyedele said Nigeria’s economic performance was showing signs of improvement, with growth becoming more broad-based across sectors, inflation gradually declining, and the country’s external position strengthening through improved reserves and a current account surplus.
He added that debt indicators had also improved, including a reduction 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 collapsing or that reforms have failed. Rather, it affirms that reforms are working and should be sustained to achieve inclusive growth,” the statement said.
The Federal Government reaffirmed its commitment to fiscal transparency, enhanced revenue mobilisation, and efficient public spending, while urging the media and stakeholders to engage responsibly with fiscal data to avoid misinterpretations that could undermine ongoing reforms and public confidence.
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