The Federal Ministry of Finance has dismissed recent media reports suggesting that a significant portion of Nigeria’s federation earnings is being diverted or constitutes “hidden spending,” describing such interpretations as a misrepresentation of the latest Nigeria Development Update by the World Bank.
In a statement signed by the Minister of State for Finance, Taiwo Oyedele, on April 19, 2026, the ministry said the claims stem from a misunderstanding of the country’s fiscal framework.
“The attention of the Federal Ministry of Finance has been drawn to recent media reports and commentaries that misrepresent the findings of the latest Nigeria Development Update by the World Bank,” Oyedele said. “These interpretations misrepresent the World Bank’s analysis and reflect a misunderstanding of the fiscal system.”
The ministry clarified that deductions made by the Federation Account Allocation Committee (FAAC) have been wrongly described as waste or missing funds.
According to the statement, such deductions cover 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.
“It is important to emphasise that refunds and transfers to states and other tiers of government are not leakages,” Oyedele stated. “They represent legitimate fiscal flows, including repayments of obligations and statutorily backed allocations.”
The ministry also accused some commentators of relying on outdated data while ignoring recent reforms highlighted in the report.
It noted that the World Bank acknowledged reforms introduced in early 2026, including an Executive Order aimed at safeguarding petroleum revenue remittances.
“These reforms are already addressing concerns around deductions and are expected to improve transparency while increasing revenues available to all tiers of government by about 0.4 per cent of GDP annually,” the minister said.
He added that focusing on isolated aspects of the report without acknowledging ongoing reforms creates a distorted narrative.
The statement stressed that the broader message of the World Bank report is optimistic, citing improvements in Nigeria’s macroeconomic fundamentals.
Oyedele noted that economic growth is becoming more broad-based, inflation is gradually declining due to policy measures, and the country’s external position has strengthened with improved reserves and a current account surplus.
He further highlighted that Nigeria’s debt indicators have improved, including a decline in the debt-to-GDP ratio, the first in over a decade.
Contrary to claims of fiscal distress, the minister said the World Bank report does not suggest that Nigeria’s fiscal system is failing.
“The World Bank does not conclude that Nigeria’s fiscal system is collapsing or that reforms have failed,” he said. “Rather, it states that reforms are working and must be sustained and deepened to translate macroeconomic gains into inclusive growth.”
Reaffirming the government’s commitment to transparency and fiscal discipline, Oyedele urged stakeholders and the media to engage responsibly with economic data.
“An accurate understanding and responsible reporting of fiscal information are critical to maintaining confidence in Nigeria’s reform trajectory and economic outlook,” he said. “We urge stakeholders, media organisations, and the public to avoid twisted interpretations that may undermine reform efforts and fuel public discord.”
