Federal Ministry of Finance Nigeria Denies Revenue Diversion Claims, Faults Misreading of World Bank Report

In a statement signed by the Minister of State for Finance, Taiwo Oyedele, the ministry said recent media reports had misrepresented the World Bank’s findings, particularly allegations suggesting “hidden spending” within the fiscal system.

“These interpretations misrepresent the World Bank’s analysis and reflect a misunderstanding of the fiscal system,” the statement read.

FAAC Deductions Not Missing Funds

Addressing concerns over deductions from the Federation Account Allocation Committee (FAAC), the ministry stressed that such deductions are legitimate fiscal obligations, not waste or diverted funds.

According to the ministry, FAAC deductions cover:

• Statutory transfers
• Savings and investments
• Security-related expenditures
• Cost-of-collection charges
• Refunds to Ministries, Departments, and Agencies (MDAs)
• Transfers and interventions to subnational governments

Oyedele emphasised that refunds and allocations to states are not leakages, but lawful financial flows backed by statutory provisions.

Warning Against Misinterpretation

The ministry also criticised what it described as the selective use of outdated data, warning that ignoring recent reforms creates a distorted narrative.

It highlighted reforms introduced in early 2026, including a new Executive Order aimed at improving petroleum revenue remittances—an initiative the World Bank says could boost revenues by about 0.4% of GDP annually.

Positive Economic Outlook

Contrary to claims of fiscal distress, the ministry said the World Bank report paints a largely positive economic outlook, citing:

• Broader economic growth
• Declining inflation
• Improved external reserves
• A current account surplus
• A drop in Nigeria’s debt-to-GDP ratio—the first in over a decade

“The World Bank does not conclude that Nigeria’s fiscal system is collapsing,” the ministry stated. “Rather, it notes that reforms are working and should be sustained.”

Commitment to Transparency

Reaffirming its stance, the ministry said it remains committed to:

• Strengthening fiscal transparency
• Improving revenue mobilisation
• Ensuring efficient public spending
• Deepening reforms for inclusive growth

It also urged the media and stakeholders to exercise caution in interpreting fiscal data, warning against narratives that could undermine ongoing reforms and fuel public distrust.