THE Federal Ministry of Finance has dismissed claims that Nigeria is engaging in “hidden spending” or diverting federation revenue, describing such reports as a misrepresentation of the latest Nigeria Development Update by the World Bank.
In a press statement issued on Sunday, April 19, the Minister of State for Finance, Taiwo Oyedele, said recent media commentaries misunderstood key aspects of the report, particularly deductions made by the Federation Account Allocation Committee (FAAC).
“The misreporting in question incorrectly characterises Federation Account Allocation Committee (FAAC) deductions as “waste” or missing funds. This is incorrect,” Oyedele said.
The ICIR reports that the ministry’s clarification follows public debate triggered by the latest Nigeria Development Update released by the World Bank.
The report examines Nigeria’s fiscal position, revenue flows, and macroeconomic outlook, highlighting concerns around deductions from the federation account while also noting ongoing reforms to improve transparency and efficiency.
Some analysts interpretations of the report suggest that a significant share of FAAC revenues was being diverted or not transparently accounted for, sparking criticism from civil society groups.
Their arguments focused on the scale of deductions and raised questions about fiscal transparency, prompting reactions from stakeholders and now the federal government.
The ministry maintained that FAAC deductions are legitimate fiscal transactions and not evidence of waste or missing funds. It explained that the deductions cover statutory transfers, savings and investments, security-related expenditures, cost-of-collection charges, refunds to Ministries, Departments and Agencies (MDAs), and transfers benefiting state and local 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, including repayments of obligations and statutorily backed allocations,” the minister said.
Oyedele also accused some analysts of selectively using outdated data while ignoring ongoing reforms highlighted in the World Bank report, pointing to new public financial management measures introduced in early 2026.
“Some commentaries selectively relied on past data while ignoring the forward-looking analysis and ongoing public financial management reforms highlighted in the report. The World Bank explicitly notes that reforms implemented in early 2026, including the recently signed Executive Order to safeguard remittance of petroleum revenues, are already addressing concerns around deductions, and are expected to improve transparency while increasing revenues available to all tiers of government by about 0.4 per cent of GDP annually,” he added.
Highlighting broader findings from the report, the minister said Nigeria’s economic outlook is improving, with growth becoming more diversified across sectors and inflation gradually easing due to policy interventions.
“The broader message of the World Bank report is positive and forward-looking: Economic growth is becoming more broad-based across sectors. Inflation, while still elevated, is declining due to deliberate policy actions. Nigeria’s external position has strengthened significantly, with improved reserves and a current account surplus,” Oyedele said.
Contrary to claims of fiscal distress, he stressed that the World Bank report does not suggest a collapse of Nigeria’s fiscal system but instead acknowledges that ongoing reforms are yielding results.
“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, and they must be sustained and deepened to translate macroeconomic gains into inclusive growth,” he said.
Oyedele reaffirmed the commitment of the Federal Government to fiscal transparency, improved revenue mobilisation, and efficient public spending, as it urged media organisations and stakeholders to avoid “twisted interpretations” of fiscal data that could undermine public confidence and reform efforts.
Nanji is an investigative journalist with the ICIR. She has years of experience in reporting and broadcasting human angle stories, gender inequalities, minority stories, and human rights issues. She has documented sexual war crimes in armed conflict, sex for grades in Nigerian Universities, harmful traditional practices and human trafficking.