The Federal Government has strongly rejected claims alleging missing federation revenue and hidden spending, insisting that deductions from the Federation Account Allocation Committee (FAAC) are lawful fiscal processes and not evidence of diversion or leakage of public funds.
The position was contained in a statement issued on Sunday by the Minister of State for Finance, Dr Taiwo Oyedele, who responded to recent media reports (Not THE WHISTLER) and commentaries interpreting the latest Nigeria Development Update of the World Bank as suggesting that a significant portion of federation earnings was being “diverted” or “hidden.”
According to the minister, such interpretations are misleading and reflect a misunderstanding of Nigeria’s fiscal structure and how federation revenues are managed and distributed.
“The misreporting in question incorrectly characterises Federation Account Allocation Committee (FAAC) deductions as ‘waste’ or missing funds. This is incorrect,” Oyedele stated.
He explained that FAAC deductions, as clearly outlined 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 to subnational governments.
The minister stressed that these deductions are not irregularities but constitutionally backed and legally approved fiscal flows within Nigeria’s public finance system.
“It is important to emphasise that 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,” he said.
Oyedele also cautioned against what he described as selective interpretation of data by some commentators, noting that reliance on outdated figures while ignoring ongoing reforms presents a distorted view of Nigeria’s fiscal position.
He pointed out that the World Bank report itself acknowledged recent reforms undertaken by the Federal Government in early 2026, including the signing of an Executive Order designed to strengthen transparency and ensure full remittance of petroleum revenues into the federation account.
“These reforms are already addressing concerns around deductions and are expected to improve transparency while increasing revenues available to all tiers of government by about 0.4 per cent of GDP annually,” he added.
The minister further noted that contrary to claims of fiscal instability, the broader assessment by the World Bank presented a more positive outlook for Nigeria’s economy.
He said the report highlighted that economic growth was becoming more diversified across sectors, inflation was gradually declining due to deliberate policy interventions, and Nigeria’s external position had improved with stronger foreign reserves and a current account surplus.
According to him, there have also been notable improvements in debt sustainability indicators, including a decline in the debt-to-GDP ratio for the first time in over a decade.
“These developments reflect the outcomes of ongoing macroeconomic reforms and public financial management improvements under the current administration,” Oyedele stated.
He emphasised that the World Bank did not conclude that Nigeria’s fiscal system was broken or that reforms had failed, but rather that the reforms underway are beginning to yield results and must be sustained and deepened.
“The World Bank’s message is clear: reforms are working, but they must be sustained to translate macroeconomic gains into inclusive growth that benefits Nigerians more broadly,” he said.
The minister reaffirmed the Federal Government’s commitment to strengthening fiscal transparency, improving revenue mobilisation, ensuring efficient and accountable public spending, and deepening reforms aimed at economic stability and inclusive development.
He urged media organisations, analysts, and the public to exercise caution and responsibility in interpreting fiscal data, warning that misrepresentation of official reports could undermine public confidence in ongoing economic reforms.
“An accurate understanding and responsible reporting of fiscal information are critical to maintaining confidence in Nigeria’s reform trajectory and economic outlook,” he said.
The statement concluded with a call for constructive engagement with government reforms, noting that transparency and accountability remain central pillars of the administration’s fiscal strategy going forward.
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