The Minister of State for Finance, Taiwo Oyedele, said claims suggesting that a significant portion of federation earnings was being diverted were inaccurate
The Federal Government has dismissed allegations of hidden spending and diversion of federation revenue, saying recent reports misrepresented findings contained in the latest Nigeria Development Update by the World Bank.
In a statement issued in Abuja on Sunday, the Minister of State for Finance, Taiwo Oyedele, said claims suggesting that a significant portion of federation earnings was being diverted were inaccurate.
He explained that such interpretations were based on a misunderstanding of Nigeria’s fiscal structure and how public funds are managed.
Oyedele clarified that deductions by the Federation Account Allocation Committee (FAAC) are statutory and not irregular or unaccounted for.
He said the deductions include transfers, savings, investments, security-related spending, cost of collection charges, refunds to Ministries, Departments and Agencies (MDAs), as well as allocations to states and other tiers of government.
According to him, refunds and transfers to subnational governments are lawful fiscal flows and should not be described as leakages.
He added that they represent legitimate repayments and allocations backed by existing laws and financial regulations.
The minister also faulted what he described as selective use of outdated data in some media reports.
He noted that the World Bank report recognised ongoing reforms aimed at improving transparency and strengthening revenue generation.
Oyedele said recent reforms introduced in early 2026, including a new Executive Order on petroleum revenue remittance, are already addressing concerns around deductions.
He added that the measures are expected to increase revenues available to all tiers of government by about 0.4 per cent of Gross Domestic Product annually.
Highlighting the broader economic outlook, he said Nigeria’s performance was gradually improving across key indicators.
He noted that growth is becoming more widespread across sectors, inflation is easing, and the country’s external position is strengthening through improved reserves and a current account surplus.
Oyedele also said debt indicators had improved, including a reduction in the debt-to-GDP ratio for the first time in over a decade.
He stressed that the World Bank did not conclude that Nigeria’s fiscal system was collapsing or that reforms had failed.
Instead, he said the report affirmed that ongoing reforms were working and should be sustained to achieve inclusive growth.
The Federal Government reaffirmed its commitment to fiscal transparency, improved revenue mobilisation, and efficient public spending.
It also urged the media and other stakeholders to engage responsibly with fiscal data to avoid misinterpretation that could undermine public confidence in ongoing reforms.
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