FG denies revenue diversion claims, says World Bank report misinterpreted

The Federal Government has dismissed claims that large portions of Nigeria’s federation revenue are being diverted or concealed, describing such interpretations as a misreading of the World Bank’s latest assessment of the country’s economy.

In a statement issued on Sunday, the Minister of State for Finance, Taiwo Oyedele, said recent media reports had distorted the findings of the World Bank Nigeria Development Update, particularly assertions suggesting “hidden spending” and diversion of funds.

“The attention of the Federal Ministry of Finance has been drawn to recent media reports and commentaries that misrepresent the findings… particularly claims suggesting that a significant portion of federation earnings is being ‘diverted’ or constitutes ‘hidden spending’,” Oyedele said.

He stressed that such conclusions do not reflect the actual position of the report, noting that they stem from a misunderstanding of how Nigeria’s fiscal framework operates.

The minister clarified that deductions by the Federation Account Allocation Committee are often wrongly labelled as waste or unaccounted funds, when in reality they are legitimate fiscal obligations.

“The misreporting in question incorrectly characterises FAAC deductions as ‘waste’ or missing funds. This is incorrect,” he stated.

According to him, these deductions cover statutory transfers, savings, security-related spending, cost-of-collection charges, refunds to government agencies, and financial interventions for subnational governments.

“It is important to emphasise that refunds and transfers to states and other tiers of government are not leakages. They represent legitimate fiscal flows,” Oyedele explained, adding that many of these payments are backed by law and tied to existing obligations.

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Oyedele also criticised what he described as the selective use of outdated data in some commentaries, arguing that such narratives ignore ongoing reforms already acknowledged in the World Bank report.

“Some commentaries selectively relied on past data while ignoring the forward-looking analysis and ongoing public financial management reforms highlighted in the report,” he said.

He pointed to recent policy measures, including an executive order aimed at improving the remittance of petroleum revenues, noting that these steps are expected to enhance transparency and boost distributable revenue.

“The World Bank explicitly notes that reforms implemented in early 2026… are already addressing concerns around deductions and are expected to increase revenues available to all tiers of government,” he added.

Contrary to the negative interpretations circulating in parts of the media, the minister said the overall message of the World Bank report is optimistic about Nigeria’s economic direction.

“The broader message of the World Bank report is positive and forward-looking,” he stated, citing improvements in economic growth, declining inflation, stronger external reserves, and a current account surplus.

He also noted progress in debt sustainability, pointing out that Nigeria has recorded a decline in its debt-to-GDP ratio for the first time in over a decade.

“These developments reflect the outcomes of the current administration’s ongoing macroeconomic policies and public financial management reforms,” Oyedele said.

The minister emphasised that the World Bank did not conclude that Nigeria’s fiscal system is failing, but rather that reforms are yielding results and should be sustained.

“The World Bank does not conclude that Nigeria’s fiscal system is collapsing or that reforms have failed. Rather, it states that reforms are working,” he said.

He urged media organisations and stakeholders to engage responsibly with fiscal data, warning that misinterpretations could undermine public confidence and reform efforts.

“An accurate understanding and responsible reporting of fiscal information are critical to maintaining confidence in Nigeria’s reform trajectory,” Oyedele stated.

Reaffirming the government’s position, he said authorities remain committed to improving transparency, strengthening revenue mobilisation, and ensuring efficient public spending to support inclusive economic growth.

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