Finance / 20 Apr 2026

FAAC deductions: Refunds to States, MDAs not hidden spending - Oyedele clarifies

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FAAC deductions: Refunds to States, MDAs not hidden spending - Oyedele clarifies

The Minister of State for Finance, Taiwo Oyedele, has dismissed clarified that claims suggesting a portion of federation earnings is being diverted or constitutes hidden spending are based on a fundamental misunderstanding of the nation’s fiscal system.

Oyedele emphasized that characterizing Federation Account Allocation Committee (FAAC) deductions as waste or missing funds is factually incorrect.

He noted that these figures represent legitimate fiscal flows, including statutory transfers, savings, security-related expenditures, and cost-of-collection charges.

The Minister stressed that refunds and transfers to states and other tiers of government are not leakages but are instead statutorily backed allocations and repayments of obligations necessary for the functioning of the federation.

The Minister further clarified that some commentaries have selectively relied on outdated data while ignoring the progressive reforms highlighted in the World Bank report.

Oyedele pointed to the recently signed 2026 Executive Order aimed at safeguarding the remittance of petroleum revenues as a key measure already addressing concerns around deductions.

These reforms are expected to improve transparency and increase the revenues available to all tiers of government by approximately 0.4% of GDP annually.

The broader message of the World Bank report, according to the Minister, is actually positive and forward-looking.

"The data indicates that Nigeria’s economic growth is becoming more broad-based, inflation is declining due to deliberate policy, and the national debt-to-GDP ratio has fallen for the first time in over a decade," he said.

Oyedele further reaffirmed the Federal Government's commitment to fiscal transparency and efficient public spending.

He urged the media and the general public to engage constructively with fiscal information, warning that twisted interpretations of the World Bank’s analysis could undermine reform efforts and fuel unnecessary public discord.