The Federal Government has refuted allegations of hidden spending and diversion of federation revenue, stating that recent reports misinterpreted findings from the latest World Bank Nigeria Development Update.
In a statement issued in Abuja, the Minister of State for Finance, Taiwo Oyedele, clarified that claims suggesting large-scale diversion of revenue were based on a misunderstanding of Nigeria’s fiscal structure.
He explained that deductions made by the Federation Account Allocation Committee (FAAC), which some reports labelled as leakages, are in fact lawful and statutory components of public financial management.
According to him, these 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 to subnational governments.
He further noted that refunds and intergovernmental transfers should not be classified as missing funds, as they represent legally backed fiscal obligations and repayments within the public finance system.
Oyedele also criticised the use of outdated data in some interpretations of the report, stressing that the World Bank acknowledged ongoing reforms aimed at improving transparency and strengthening revenue generation.
He highlighted that recent reforms introduced in 2026, including an Executive Order on petroleum revenue remittance, are already improving fiscal efficiency and are expected to increase revenues available to all tiers of government by about 0.4% of Gross Domestic Product annually.
The minister added that Nigeria’s macroeconomic indicators are showing gradual improvement, with stronger economic growth across sectors, easing inflationary pressures, improved external reserves, and a current account surplus.
He also noted progress in debt management, 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 collapsing or that reforms have failed. Rather, it affirms that reforms are working and should be sustained to achieve inclusive growth,” the statement read.
The Federal Government reaffirmed its commitment to fiscal transparency, improved revenue mobilisation, and efficient public spending, while urging media organisations and stakeholders to handle fiscal data responsibly to avoid misinterpretation that could undermine ongoing reforms and public confidence.
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