By Jeremy Fregene
The Federal Ministry of Finance has rejected claims that large portions of Nigeria’s federation revenue are being diverted or concealed, insisting that recent interpretations of the World Bank’s Nigeria Development Update are misleading and inaccurate.
In a statement issued on April 19, the Minister of State for Finance, Taiwo Oyedele, said media reports alleging “hidden spending” stem from a misreading of the World Bank’s analysis and a poor understanding of the country’s fiscal framework.
The ministry clarified that deductions from the Federation Account Allocation Committee (FAAC) are often wrongly portrayed as waste or missing funds, whereas they consist of legitimate and legally backed financial obligations. These 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 state and local governments.
According to the ministry, such allocations are not leakages but integral components of Nigeria’s fiscal operations, including repayments and constitutionally mandated distributions across different tiers of government.
The statement also accused some commentators of selectively relying on outdated data while ignoring recent reforms acknowledged in the World Bank report. It noted that measures introduced in early 2026, including an executive order aimed at strengthening the remittance of petroleum revenues, are already improving transparency and are projected to increase distributable revenues by about 0.4 percent of GDP annually.
Oyedele emphasised that focusing narrowly on certain aspects of the report without recognising ongoing fiscal reforms presents a distorted narrative of Nigeria’s economic position.
Highlighting the broader findings of the report, the ministry said the World Bank painted a largely positive and forward-looking picture of the economy, citing more diversified economic growth, a gradual decline in inflation, improved external reserves, a current account surplus, and a reduction in the country’s debt-to-GDP ratio—the first such decline in over a decade.
The ministry maintained that these indicators reflect the impact of ongoing macroeconomic policies and public financial management reforms under the current administration.
It further stressed that the World Bank did not conclude that Nigeria’s fiscal system is failing but rather affirmed that reforms are yielding results and should be sustained to achieve inclusive growth.
Reaffirming the government’s commitment to transparency and efficient public spending, the ministry urged stakeholders and the media to engage responsibly with fiscal data and avoid misinterpretations that could undermine confidence in the country’s economic reform agenda.