The Federal Ministry of Finance has dismissed recent media reports alleging hidden spending and diversion of federation revenue, describing the claims as a misrepresentation of findings from the latest Nigeria Development Update by the World Bank.
In a press statement signed on Sunday by Taiwo Oyedele, Minister of State for Finance, the ministry said interpretations suggesting that a significant portion of government earnings is being diverted or classified as “hidden spending” stem from a misunderstanding of Nigeria’s fiscal framework. It stressed that the World Bank report did not support such conclusions.
The ministry addressed what it called widespread misinterpretation of deductions from the Federation Account Allocation Committee (FAAC), noting that these have been wrongly labelled as waste or missing funds.
According to the statement, FAAC deductions include statutory transfers, savings and investments, security expenditures, cost-of-collection charges, and refunds to Ministries, Departments and Agencies (MDAs), as well as transfers to subnational governments.
It emphasised that these transactions are legitimate fiscal obligations, adding that refunds and transfers to states are not leakages but legally backed financial flows, including repayments and statutory allocations.
The ministry also criticised some commentaries for relying on outdated data while ignoring ongoing reforms highlighted in the World Bank report.
It noted that recent measures introduced in early 2026 including a new Executive Order aimed at ensuring proper remittance of petroleum revenues are already addressing concerns about deductions. These reforms, it said, are expected to improve transparency and boost revenues available to all tiers of government by approximately 0.4 percent of GDP annually.
Contrary to negative interpretations, the ministry said the broader message of the World Bank report is optimistic. It pointed to signs of more diversified economic growth, declining inflation driven by policy actions, and a stronger external position supported by improved reserves and a current account surplus.
The statement also highlighted improvements in Nigeria’s debt profile, including a reduction in the debt-to-GDP ratio for the first time in over a decade.
Reforms ‘Working but Must Continue’
According to the ministry, the World Bank did not conclude that Nigeria’s fiscal system is failing. Instead, it indicated that reforms are yielding results but need to be sustained and expanded to ensure inclusive economic growth.
The Federal Government reiterated its commitment to enhancing fiscal transparency, strengthening revenue mobilisation, and ensuring efficient public spending.
It urged media organisations and stakeholders to report fiscal matters responsibly and avoid misinterpretations that could undermine ongoing reforms and erode public confidence.
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