The Federal Ministry of Finance has rejected allegations that Nigeria’s federation revenues are being diverted or concealed, insisting that recent reports suggesting “hidden spending” stem from a misinterpretation of the World Bank’s latest Nigeria Development Update.
In a statement issued on Sunday, the Minister of State for Finance, Taiwo Oyedele, said the reports “misrepresent the World Bank’s analysis” and reflect a poor understanding of the country’s fiscal framework.
The ministry specifically faulted claims surrounding deductions by the Federation Account Allocation Committee, noting that such deductions are legitimate and should not be classified as waste or missing funds.
According to the statement, FAAC deductions cover statutory transfers, security-related spending, savings and investments, cost-of-collection charges, as well as refunds to Ministries, Departments and Agencies and allocations to subnational governments.
“It is important to emphasise that refunds and transfers to states and other tiers of government are not leakages,” Oyedele said.
“They represent legitimate fiscal flows, including repayments of obligations and statutorily backed allocations.”
The ministry also criticised what it described as the selective use of outdated data by some commentators, warning that ignoring recent reforms highlighted in the World Bank report creates a distorted narrative of Nigeria’s fiscal health.
It pointed to measures introduced in early 2026, including a new Executive Order aimed at improving petroleum revenue remittances, which the World Bank said could boost transparency and increase distributable revenues by about 0.4 per cent of Gross Domestic Product annually.
Highlighting broader economic indicators, the ministry said the report painted a largely positive outlook for Nigeria, citing more diversified economic growth, easing inflationary pressures, improved external reserves, and a current account surplus.
It also noted an improvement in debt metrics, including a decline in the country’s debt-to-GDP ratio—the first recorded drop in over a decade.
“The World Bank does not conclude that Nigeria’s fiscal system is collapsing or that reforms have failed,” the ministry stated. “Rather, it affirms that reforms are yielding results and should be sustained to achieve inclusive growth.”
Reaffirming its commitment to fiscal discipline, the ministry said it would continue to prioritise transparency, revenue mobilisation, and efficient public spending, while urging the media and stakeholders to avoid “misleading interpretations” that could undermine ongoing reforms.
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