FG rejects “hidden spending” claims, citing misinterpreted World Bank report

The Federal Ministry of Finance has pushed back against claims that the federal government is diverting federation revenue, describing such interpretations as a misreading of the latest Nigeria Development Update by the World Bank.

In a statement signed by Taiwo Oyedele, the minister of state for finance, the ministry said reports suggesting “hidden spending” or missing funds were inaccurate and failed to properly reflect how Nigeria’s fiscal system operates.

The ministry clarified that deductions from the Federation Account Allocation Committee (FAAC) should not be seen as leakages or waste, as they cover legitimate expenditures and obligations.

These include statutory transfers, savings and investments, security spending, cost-of-collection charges, refunds to ministries and agencies, as well as transfers and interventions to state governments.

According to the ministry, refunds and allocations to subnational governments are lawful fiscal flows, not diverted funds, as they often represent repayments or constitutionally backed distributions.

Criticism based on outdated or selective data

The statement also accused some commentators of relying on outdated figures while ignoring recent reforms highlighted in the World Bank report.

It pointed to measures introduced in early 2026, including a new executive order aimed at improving petroleum revenue remittances, which are expected to boost transparency and increase distributable revenue by about 0.4% of GDP annually.

By focusing narrowly on deductions without acknowledging these reforms, the ministry said, critics present a distorted view of the country’s fiscal health.

Government highlights improving economic outlook

Beyond the controversy, the ministry emphasised that the broader message of the World Bank report is positive.

It noted that economic growth is becoming more diversified, inflation is gradually easing, and Nigeria’s external position has strengthened with improved reserves and a current account surplus. Debt metrics have also improved, including a decline in the debt-to-GDP ratio for the first time in over a decade.

The ministry concluded that the World Bank did not suggest Nigeria’s fiscal system is failing, but rather that ongoing reforms are yielding results and should be sustained.

It urged media organisations and stakeholders to engage more carefully with fiscal data, warning that misinterpretation could undermine public confidence and ongoing reform efforts.

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