The Federal Ministry of Finance has dismissed recent claims suggesting that a significant portion of federation revenue is being diverted or hidden, describing such reports as a misinterpretation of the World Bank’s latest Nigeria Development Update.
In a press statement issued on Sunday and signed by the Minister of State for Finance, Taiwo Oyedele, the ministry clarified that the allegations stating it’s a misunderstanding of the country’s fiscal framework, particularly the workings of the Federation Account Allocation Committee (FAAC).
The ministry explained that deductions from FAAC, which some commentators have labelled as “waste” or missing funds, are legitimate fiscal components which 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.
According to the statement, such transfers and refunds do not constitute leakages but are lawful financial obligations, including repayments and statutory allocations due to various tiers of government.
The ministry also accused some analysts of selectively relying on outdated data while ignoring recent reforms and forward-looking projections contained in the World Bank report. It noted that reforms introduced in early 2026, including an Executive Order aimed at safeguarding petroleum revenue remittances, are already addressing concerns around deductions.
“These measures 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.
Highlighting the broader findings of the report, the ministry stressed that Nigeria’s economic outlook remains positive, with growth becoming more diversified across sectors stating that inflation is gradually easing due to policy interventions, while the country’s external reserves have strengthened alongside a current account surplus.
The statement further noted improvements in debt indicators, including a decline in the debt to GDP ratio for the first time in over a decade, attributing the progress to ongoing macroeconomic policies and public financial management reforms.
The ministry maintained that the World Bank report does not suggest a failing fiscal system but rather underscores that existing reforms are yielding results and should be sustained to achieve inclusive growth.
Reaffirming the Federal Government’s commitment to transparency and fiscal discipline, the ministry urged the media and stakeholders to ensure accurate reporting and avoid misrepresentations capable of undermining public confidence in ongoing reforms adding that responsible engagement with fiscal information is essential to sustaining Nigeria’s economic reform trajectory and preventing unnecessary public discord.