FG Rejects Claims of Hidden Spending, Revenue Diversion
The Federal Ministry of Finance has dismissed recent allegations suggesting that large portions of Nigeria’s federation revenue are being secretly spent or diverted, describing the claims as false and based on a misinterpretation of the latest Nigeria Development Update released by World Bank.
In a press statement issued on Saturday, by the Minister of State Finance, Taiwo Oyedele, the ministry said reports portraying deductions from the Federation Account Allocation Committee (FAAC) as “waste” or missing funds were misleading and failed to reflect how Nigeria’s fiscal system operates.
According to the ministry, FAAC deductions include legitimate expenditures such as statutory transfers, savings and investments, security-related spending, cost-of-collection charges, refunds to Ministries, Departments and Agencies (MDAs), as well as transfers and interventions benefiting state and local governments.
It stressed that refunds and allocations to sub-national governments should not be described as leakages, noting that they represent lawful fiscal transfers and repayments of obligations.
The ministry also accused some commentators of selectively using outdated figures while ignoring reforms already introduced in 2026 to improve revenue remittances and transparency.
It referenced a recently signed Executive Order aimed at safeguarding petroleum revenue remittances, which it said is expected to raise revenues available to all tiers of government by about 0.4 percent of GDP annually.
Highlighting broader economic trends, the ministry said the World Bank report acknowledged positive developments in Nigeria’s economy, including more broad-based growth across sectors, easing inflation, stronger external reserves, a current account surplus, and an improvement in debt indicators.
It added that the debt-to-GDP ratio had declined for the first time in over a decade. The ministry maintained that the World Bank did not conclude that Nigeria’s fiscal system was collapsing or that reforms had failed. Rather, it said the report called for sustaining and deepening reforms so that macroeconomic gains could translate into inclusive growth.
Reaffirming the Federal Government’s position, the ministry said it remains committed to fiscal transparency, stronger revenue mobilisation, prudent spending, and reforms that support long-term economic stability.
