The Federal Ministry of Finance has dismissed recent media reports alleging widespread diversion and “hidden spending” of federation revenues, describing the claims as a misinterpretation of findings in the World Bank’s latest Nigeria Development Update.
In a press statement signed by the Minister of State for Finance, Taiwo Oyedele, the ministry said the reports distorted the World Bank’s analysis and reflected a misunderstanding of Nigeria’s fiscal structure.
FAAC Deductions Not Missing Funds
The ministry clarified that deductions made by the Federation Account Allocation Committee (FAAC), which some commentators described as waste or missing funds, are legitimate and accounted for within the fiscal system.
According to the statement, these deductions cover statutory transfers, savings and investments, security expenditures, cost-of-collection charges, refunds to Ministries, Departments and Agencies (MDAs), and transfers supporting subnational governments.
It stressed that such transfers and refunds should not be misconstrued as leakages, noting they represent lawful fiscal obligations and allocations across different tiers of government.
Criticism of Selective Data Use
The ministry also accused some analysts of relying on outdated data while ignoring recent reforms and forward-looking projections contained in the World Bank report.
It highlighted reforms introduced in early 2026, including a new Executive Order aimed at ensuring proper remittance of petroleum revenues.
These measures, the World Bank noted, are expected to boost transparency and increase distributable revenues by about 0.4 percent of GDP annually.
Positive Economic Outlook
Contrary to claims of fiscal instability, the ministry said the World Bank report presents a more optimistic picture of Nigeria’s economy, citing:
Broader-based economic growth across sectors
Declining inflation due to policy interventions
Strengthened external reserves and a current account surplus
Improved debt indicators, including a reduction in the debt-to-GDP ratio for the first time in over a decade
Reforms ‘Working but Must Continue’
The ministry emphasized that the World Bank did not conclude that Nigeria’s fiscal system is failing. Instead, it acknowledged that ongoing reforms are yielding results and should be sustained to ensure inclusive economic growth.
Reaffirming the government’s commitment to fiscal transparency and efficient public spending, the ministry urged media organisations and stakeholders to avoid misrepresenting economic data.
It warned that inaccurate reporting could undermine public confidence and distort Nigeria’s reform trajectory.
“The Federal Government remains committed to strengthening fiscal transparency, improving revenue mobilisation, and deepening reforms to support inclusive growth,” the statement said.
