By Ayo Ayodele
The Federal Ministry of Finance has dismissed recent claims alleging hidden spending and diversion of 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, the Minister of State for Finance, Taiwo Oyedele, said the interpretations circulating in sections of the media reflect a misunderstanding of Nigeria’s fiscal framework.
The ministry clarified that deductions made by the Federation Account Allocation Committee (FAAC) have been wrongly portrayed as waste or missing funds. According to the statement, these deductions cover statutory transfers, savings and investments, security-related expenditures, cost-of-collection charges, as well as refunds and allocations to Ministries, Departments and Agencies (MDAs) and subnational governments.
It stressed that such financial flows are legitimate and backed by law, noting that refunds and transfers to states and other tiers of government should not be misconstrued as leakages but rather as repayments and statutory obligations.
The ministry also faulted what it described as the selective use of outdated data by some commentators, arguing that this ignores key reforms already highlighted in the World Bank report. It pointed out that recent measures, including a new Executive Order to ensure proper remittance of petroleum revenues, are expected to improve transparency and boost distributable revenue by about 0.4 percent of Nigeria’s Gross Domestic Product annually.
Highlighting the broader findings of the report, the ministry said Nigeria’s macroeconomic outlook is improving, with economic growth becoming more diversified across sectors. It added that inflation is gradually declining due to policy interventions, while the country’s external reserves and current account position have strengthened.
The statement further noted improvements in debt indicators, including a reduction in the debt-to-GDP ratio—the first such decline in over a decade—signaling progress in fiscal management.
According to the ministry, the World Bank report does not suggest a collapse of Nigeria’s fiscal system but instead acknowledges that ongoing reforms are yielding results and should be sustained to achieve inclusive economic growth.
Reaffirming its commitment, the Federal Government said it will continue to prioritise fiscal transparency, efficient public spending, and enhanced revenue mobilisation. It also urged the media and stakeholders to ensure accurate interpretation of fiscal data to avoid misleading narratives that could undermine public confidence and reform efforts.