The Federal Government has pushed back against allegations of hidden spending and diversion of federation revenue, insisting that such claims misrepresent the findings of the World Bank’s latest Nigeria Development Update.
In a statement issued by the Federal Ministry of Finance and signed by the Minister of State for Finance, Taiwo Oyedele, on Sunday 19th April, the government said interpretations circulating in some media platforms wrongly characterised statutory fiscal processes as leakages.
“The attention of the Federal Ministry of Finance has been drawn to recent media reports and commentaries that misrepresent the findings of the latest Nigeria Development Update by the World Bank, particularly claims suggesting that a significant portion of federation earnings is being ‘diverted’ or constitutes ‘hidden spending’,” the statement read.
The controversy follows the World Bank’s April 2026 edition of the Nigeria Development Update, which found that FAAC deductions gulped N14.94 trillion or 39 percent of revenues before distribution in 2025, with first-line deductions to federal ministries, departments and agencies surpassing budget allocations to major social and growth-oriented ministries.
The Finance Ministry, however, rejected the characterisation of those deductions as leakages. It clarified that FAAC deductions as referenced in the World Bank report cover statutory transfers, savings and investments, security-related expenditures, cost of collection charges, refunds to MDAs, and transfers and interventions benefiting subnational governments, all of which it described as legitimate fiscal flows within the public finance system.
Daily Post Nigeria reported that the ministry also faulted what it described as selective use of outdated data by some commentators, noting that ongoing public financial management reforms highlighted in the World Bank report had been ignored.
It pointed to measures introduced in early 2026, including a recently signed Executive Order aimed at safeguarding the remittance of petroleum revenues, which the World Bank said are expected to improve transparency and increase distributable revenue to all tiers of government by about 0.4 percent of GDP annually.
On the broader picture, the ministry said the World Bank’s overall assessment was positive, noting improvements in economic growth across sectors, a decline in inflation, stronger external reserves, a current account surplus, and a reduction in the debt-to-GDP ratio, the first such improvement in over a decade.
“The World Bank does not conclude that Nigeria’s fiscal system is collapsing or that reforms have failed. Rather, it states that reforms are working, and they must be sustained and deepened,” the ministry stated, urging media organisations and stakeholders to avoid misinterpretations that could undermine reform efforts and fuel public discord.
