Rebuttal from the Federal Ministry of Finance as it rejected allegations of hidden spending and diversion of federation revenue, saying claims misrepresented the World Bank’s Nigeria Development Update.
ABUJA, Nigeria – The Federal Ministry of Finance has issued a strong rebuttal to allegations of hidden spending and diversion of federation revenue, saying recent reports misrepresented findings contained in the latest Nigeria Development Update by the World Bank.
In a press statement, the ministry said claims suggesting that a significant portion of federation earnings was being diverted or concealed reflected a misunderstanding of Nigeria’s fiscal system.
According to the ministry, some media reports wrongly characterised deductions under the Federation Account Allocation Committee (FAAC) as waste or missing funds.
It explained that FAAC deductions 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.
The ministry stressed that refunds and transfers to states and other tiers of government are legitimate fiscal flows rather than leakages.
“These represent repayments of obligations and statutorily backed allocations,” the statement said.
The government also accused some commentators of making selective use of outdated data while ignoring forward-looking reforms and recent improvements highlighted in the World Bank report.
It noted that reforms introduced in early 2026, including a recently signed Executive Order to safeguard remittance of petroleum revenues, were already addressing concerns around deductions.
According to the ministry, the reforms are expected to improve transparency and increase revenues available to all tiers of government by about 0.4 per cent of GDP annually.
The statement said presenting one part of the report without acknowledging ongoing reforms created a distorted picture of the country’s fiscal position.
Highlighting broader findings, the ministry said the World Bank report showed that economic growth was becoming more broad-based across sectors.
It added that inflation, though still elevated, was declining due to deliberate policy actions.
The statement further said Nigeria’s external position had strengthened significantly, supported by improved reserves and a current account surplus.
The ministry also pointed to stronger debt indicators, including a decline in the debt-to-GDP ratio, describing it as the first reduction in more than a decade.
“These developments reflect the outcomes of the current administration’s ongoing macroeconomic policies and public financial management reforms,” it said.
The ministry insisted that the World Bank did not conclude that Nigeria’s fiscal system was collapsing or that reforms had failed.
Instead, it said the report recognised that reforms were working and should be sustained and deepened to translate macroeconomic gains into inclusive growth.
In its conclusion, the Federal Government reaffirmed commitment to fiscal transparency, improved revenue mobilisation, efficient public spending and deeper reforms to support long-term economic expansion.
The ministry urged stakeholders, media organisations and the public to engage constructively with fiscal information and avoid distorted interpretations that could undermine confidence in ongoing reforms.
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