Nigeria’s Federal Ministry of Finance has pushed back against claims that large portions of the country’s federation revenue are being diverted or concealed, describing such interpretations as misleading.
In a statement issued on Sunday, the ministry said recent reports had misrepresented findings from the World Bank’s latest Nigeria Development Update, particularly suggestions that earnings are being hidden or classified as “wasteful spending.”
“These interpretations reflect a misunderstanding of how the fiscal system works,” the ministry stated.
Addressing concerns about deductions from the Federation Account Allocation Committee (FAAC), the ministry insisted that such deductions are legitimate and not evidence of missing funds.
It explained that FAAC deductions cover a range of statutory and necessary obligations, including transfers, savings, security-related expenditures, cost-of-collection charges, and refunds to Ministries, Departments and Agencies (MDAs).
According to the Minister of State for Finance, Taiwo Oyedele, these flows are part of normal fiscal operations.
“Refunds and transfers to states and other tiers of government are not leakages,” he said. “They are legitimate fiscal transactions backed by law.”
The ministry also criticised what it described as selective use of outdated data in some commentaries, arguing that such narratives ignore recent reforms highlighted in the World Bank report.
Among these reforms is a new Executive Order introduced in early 2026 to improve petroleum revenue remittances. The World Bank noted that the measure could boost transparency and increase distributable revenue by about 0.4 percent of GDP annually.
Beyond the dispute, the ministry pointed to what it described as encouraging economic trends in the report, including broader-based growth, easing inflation, stronger external reserves, and a current account surplus. It also highlighted an improvement in debt indicators, noting a decline in Nigeria’s debt-to-GDP ratio for the first time in over a decade.
“The World Bank does not conclude that Nigeria’s fiscal system is failing,” the ministry said. “Rather, it acknowledges that reforms are yielding results and should be sustained.”
Reaffirming its stance, the ministry said it remains committed to improving transparency, boosting revenue generation, and ensuring efficient public spending.
It also urged the media and stakeholders to interpret fiscal data carefully, warning that inaccurate or sensational claims could undermine ongoing reforms and create unnecessary public tension.
