The Federal Ministry of Finance has dismissed recent media reports suggesting that a significant portion of Nigeria’s federation earnings is being diverted or hidden, describing such interpretations as misleading and based on a misunderstanding of the country’s fiscal system.
The Honourable Minister of State for Finance, Taiwo Oyedele, said the reports misrepresented findings from the latest Nigeria Development Update by the World Bank.
In a statement, Oyedele said, “The attention of the Federal Ministry of Finance has been drawn to recent media reports and commentaries that misrepresent the findings… particularly claims suggesting that a significant portion of federation earnings is being ‘diverted’ or constitutes ‘hidden spending’.”
He stressed that such claims “reflect a misunderstanding of the fiscal system” and do not accurately represent the World Bank’s analysis.
Addressing concerns around deductions by the Federation Account Allocation Committee (FAAC), the minister said it was wrong to label them as waste or missing funds. “FAAC deductions, as presented in the World Bank report, include statutory transfers, savings and investments, security-related expenditures, cost-of-collection charges, refunds to MDAs, and transfers benefiting subnational governments,” he explained.
Oyedele added that “refunds and transfers to states and other tiers of government are not leakages,” noting that they are legitimate fiscal flows backed by law, including repayments and statutory allocations.
The minister also criticised what he described as the selective use of outdated data in some commentaries. According to him, such reports ignored forward-looking aspects of the World Bank analysis and ongoing reforms in public financial management.
“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,” he said, adding that the measures are expected to boost transparency and increase revenues available to all tiers of government by about 0.4 per cent of GDP annually.
Highlighting broader findings from the report, Oyedele said the overall message was positive. “Economic growth is becoming more broad-based, inflation is declining due to deliberate policy actions, and Nigeria’s external position has strengthened significantly,” he stated. He also noted improvements in debt indicators, including a decline in the debt-to-GDP ratio for the first time in over a decade.
He emphasised that the World Bank did not conclude that Nigeria’s fiscal system is failing. “Rather, it states that reforms are working, and they must be sustained and deepened to translate macroeconomic gains into inclusive growth,” he said.
Reaffirming the government’s position, the minister said the Federal Government remains committed to strengthening fiscal transparency, improving revenue mobilisation, and ensuring efficient public spending.
He urged stakeholders and the media to report fiscal matters responsibly. “An accurate understanding and responsible reporting of fiscal information are critical to maintaining confidence in Nigeria’s reform trajectory and economic outlook,” Oyedele said, warning against “twisted interpretations that may undermine reform efforts and fuel public discord.”
