Finance Ministry Faults Misreading of World Bank Report

The Federal Ministry of Finance has dismissed allegations of hidden spending and diversion of federation revenue, describing recent media interpretations of the World Bank’s Nigeria Development Update as misleading and inaccurate.

In a statement issued on April 19, the Minister of State for Finance, Taiwo Oyedele, said claims that large portions of federation earnings are being diverted stem from a misunderstanding of Nigeria’s fiscal framework, particularly the structure of deductions by the Federation Account Allocation Committee (FAAC).

The ministry clarified that FAAC deductions, which have been labelled as “waste” or missing funds in some reports, are legitimate fiscal transactions. These include statutory transfers, savings and investments, security-related expenditures, cost-of-collection charges, and refunds to Ministries, Departments and Agencies (MDAs), as well as transfers that benefit state and local governments.

According to the statement, such transfers and refunds are not leakages but lawful allocations and repayments backed by statutory provisions. It stressed that portraying them otherwise distorts the true picture of public finance management.

The ministry also faulted what it described as the selective use of outdated data in some commentaries, noting that recent reforms highlighted in the World Bank report were ignored. It pointed to measures introduced in early 2026, including an Executive Order aimed at safeguarding petroleum revenue remittances, as evidence of ongoing efforts to enhance transparency and accountability.

These reforms, the ministry said, are already addressing concerns around revenue deductions and are projected to increase funds available to all tiers of government by about 0.4 percent of Gross Domestic Product annually.

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Highlighting broader economic trends, the statement noted that the World Bank report presents a positive outlook for Nigeria’s economy. It cited improving macroeconomic indicators, including more diversified economic growth, declining inflation, stronger external reserves, and a current account surplus.

The ministry added that Nigeria’s debt metrics have also improved, with a reduction in the debt-to-GDP ratio recorded for the first time in over a decade.

It emphasized that the World Bank did not conclude that Nigeria’s fiscal system is failing, but rather affirmed that ongoing reforms are yielding results and should be sustained to achieve inclusive growth.

Reaffirming the Federal Government’s commitment, the ministry said it will continue to strengthen fiscal transparency, improve revenue mobilisation, and ensure efficient public spending.

It urged the media and stakeholders to engage responsibly with fiscal data to avoid misinterpretations that could undermine public confidence and ongoing reform efforts.