Government Reaffirms Fiscal Transparency Amid Misinformation
The Federal Government has firmly rejected recent allegations of hidden spending and mismanagement of federation revenue, describing such claims as a misinterpretation of findings from the latest Nigeria Development Update by the World Bank. In a statement issued by the Federal Ministry of Finance and signed by the Minister of State for Finance, Taiwo Oyedele, on Sunday, the government emphasized that these reports have wrongly characterized statutory fiscal processes as leakages.
“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, particularly claims suggesting that a significant portion of federation earnings is being ‘diverted’ or constitutes ‘hidden spending’,” the statement read.
The ministry highlighted that such claims reflect a misunderstanding of Nigeria’s fiscal structure and how revenues are distributed through the Federation Account Allocation Committee (FAAC). According to the ministry, deductions from the federation account are often wrongly interpreted as waste or missing funds, a claim it firmly rejected.
“FAAC deductions, as presented in the World Bank report, include statutory transfers, savings and investments, security-related expenditures, cost-of-collection charges, refunds to Ministries, Departments and Agencies (MDAs), and transfers and interventions benefiting subnational governments,” it stated. It stressed that such deductions are legitimate fiscal flows within the public finance system.
“Refunds and transfers to states and other tiers of government are not leakages. They represent legitimate fiscal flows, including repayments of obligations and statutorily backed allocations,” the ministry added.
Addressing Outdated Data and Recent Reforms
The government also criticized commentators for relying on outdated figures while ignoring recent reforms introduced in 2026. It noted that the World Bank report already acknowledged ongoing reforms, including a new Executive Order aimed at safeguarding petroleum revenue remittances.
“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,” the statement said. It added that these reforms are projected to improve transparency and increase distributable revenues to all tiers of government by about 0.4 per cent of GDP annually.
Positive Outlook from the World Bank Report
The ministry further emphasized that the overall tone of the World Bank report was positive, contrary to interpretations suggesting fiscal distress. It pointed out several key developments:
- Economic growth is becoming more diversified across sectors.
- Inflation is beginning to ease due to policy measures.
- Nigeria’s external position has improved with stronger reserves and a current account surplus.
- A decline in the debt-to-GDP ratio, described as the first improvement in over a decade.
“These developments reflect the outcomes of the current administration’s ongoing macroeconomic policies and public financial management reforms,” it said.
Commitment to Sustaining Reforms
The ministry stressed that the World Bank report does not suggest a failure of reforms, but rather affirms that ongoing changes are yielding results that must be sustained. “The World Bank does not conclude that Nigeria’s fiscal system is collapsing or that reforms have failed. Rather, it states that reforms are working, and they must be sustained and deepened,” it added.
Call for Accurate Reporting
The statement urged media organisations and stakeholders to avoid misinterpretation of fiscal data, warning that inaccurate reporting could undermine reform efforts. “We urge stakeholders, media organisations, and the public to engage constructively with fiscal information and avoid twisted interpretations that may undermine reform efforts and fuel public discord,” it said.
