The Federal Government has dismissed reports claiming there were hidden spending and diversion of federal revenues.
Minister of State for Finance, Taiwo Oyedele, in a statement issued in Abuja on Sunday, described the reports as a misrepresentation of findings contained in the latest Nigeria Development Update by the World Bank.
According to him, recent media interpretations suggesting that a significant portion of federation earnings was being diverted were inaccurate and based on a misunderstanding of Nigeria’s fiscal framework.
He clarified that the reported deductions by the Federation Account Allocation Committee (FAAC), which had been portrayed as wasteful or missing funds, were legitimate and statutory components of public finance administration.
Such deductions, according to him, 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 benefiting subnational governments.
Oyedele argued that refunds and transfers to states and other tiers of government should not be classified as leakages, noting that they represent lawful fiscal flows, including repayments of obligations and allocations backed by law.
He also faulted what he described as the selective use of outdated data in some commentaries, stressing that the World Bank report acknowledged ongoing reforms aimed at improving transparency and boosting revenue.
The Minister pointed out that reforms introduced in early 2026, including a new Executive Order designed to safeguard the remittance of petroleum revenues, were already addressing concerns around deductions and are projected to increase revenues available to all tiers of government by about 0.4 per cent of Gross Domestic Product annually.
Highlighting the broader outlook of the report, Oyedele said Nigeria’s economic performance was showing signs of improvement, with growth becoming more broad-based across sectors, inflation gradually declining, and the country’s external position strengthening through improved reserves and a current account surplus.
Debt indicators had also improved, including a reduction in the debt-to-GDP ratio for the first time in over a decade, the Minister added.
“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 said.
Media and stakeholders were urged to engage responsibly with fiscal data to avoid misinterpretations that could undermine ongoing reforms and public confidence.
The Federal Government reaffirmed its commitment to fiscal transparency, enhanced revenue mobilisation, and efficient public spending.