The Federal Ministry of Finance has rejected claims of alleged diversion of federation revenue, describing recent interpretations of the World Bank’s Nigeria Development Update as misleading and inaccurate.
In a statement issued on Sunday, the Minister of State for Finance, Taiwo Oyedele, said reports suggesting that government earnings were being “diverted” or classified as “hidden spending” “misrepresent the World Bank’s analysis and reflect a misunderstanding of the fiscal system.”
Oyedele explained that deductions by the Federation Account Allocation Committee (FAAC) had been wrongly portrayed as waste or missing funds, stressing that such claims were unfounded.
“The misreporting in question incorrectly characterises FAAC deductions as ‘waste’ or missing funds. This is incorrect,” he said.
According to him, the deductions referenced in the report include statutory transfers, savings and investments, security-related expenditures, cost-of-collection charges, refunds to Ministries, Departments and Agencies (MDAs), as well as transfers and interventions that benefit state and local governments.
“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 added.
The minister also faulted what he described as the selective use of outdated data in some commentaries, arguing that such reports ignored recent reforms highlighted in the World Bank document.
“Misinterpreting one aspect of the analysis without acknowledging the progressive reforms already introduced gives a distorted picture,” Oyedele said.
He pointed out that measures introduced in early 2026, including a new Executive Order aimed at strengthening the remittance of petroleum revenues, were already addressing concerns around deductions.
“These reforms are expected to improve transparency while increasing revenues available to all tiers of government by about 0.4 per cent of GDP annually,” he stated.
Beyond the controversy, Oyedele said the World Bank report presented a positive outlook for the Nigerian economy.
“The broader message of the report is forward-looking. Economic growth is becoming more broad-based, inflation is declining, and Nigeria’s external position has strengthened significantly,” he said.
He added that debt indicators had also improved, noting “a decline in the debt-to-GDP ratio, the first in over a decade.”
The ministry stressed that the World Bank did not conclude that Nigeria’s fiscal system was failing, but rather affirmed that ongoing reforms were yielding results and should be sustained.
“The World Bank does not say the system is collapsing. It clearly indicates that reforms are working and must be deepened to achieve inclusive growth,” Oyedele noted.
Reaffirming the federal government’s commitment, he said efforts would continue to focus on transparency and efficient public spending.
“An accurate understanding and responsible reporting of fiscal information are critical to maintaining confidence in Nigeria’s reform trajectory,” he said, urging stakeholders and the media to avoid “twisted interpretations that may undermine reform efforts and fuel public discord.”