The Federal Ministry of Finance has dismissed allegations suggesting that a significant portion of Nigeria’s federation revenue is being diverted or concealed, describing such claims as a misinterpretation of recent findings by the World Bank.
In a press statement issued on Sunday, the Minister of State for Finance, Taiwo Oyedele, said reports alleging “hidden spending” or diversion of funds misrepresented the latest Nigeria Development Update by the World Bank.
The ministry clarified that deductions by the Federation Account Allocation Committee (FAAC) had been wrongly portrayed as waste or missing funds. It explained that such deductions cover legitimate fiscal obligations, including statutory transfers, savings and investments, security expenditures, cost-of-collection charges, refunds to Ministries, Departments and Agencies (MDAs), as well as transfers and interventions benefiting state and local governments.
According to the statement, refunds and transfers to subnational governments are not leakages but lawful financial flows tied to repayments and constitutionally backed allocations.
The ministry also accused some commentators of relying on outdated data while ignoring ongoing reforms highlighted in the World Bank report. It noted that recent measures, including a new executive order aimed at safeguarding petroleum revenue remittances, are expected to enhance transparency and boost distributable revenues by about 0.4 percent of Gross Domestic Product annually.
Highlighting the broader findings of the report, the ministry said Nigeria’s economic outlook remains positive, with growth becoming more diversified across sectors. It added that inflation is gradually declining due to policy interventions, while the country’s external reserves and current account position have improved significantly.
The statement further noted an improvement in debt indicators, including a reduction in the debt-to-GDP ratio for the first time in over a decade.
“The World Bank does not conclude that Nigeria’s fiscal system is collapsing or that reforms have failed. Rather, it affirms that reforms are yielding results and should be sustained,” the ministry stated.
Reaffirming the government’s commitment to fiscal transparency and economic reforms, the ministry urged stakeholders and media organisations to present accurate interpretations of fiscal data to avoid undermining public confidence and reform efforts.