By Oluwakemi Kindness
The Federal Government has rejected claims of hidden spending and diversion of federation revenue, saying recent reports misinterpret the World Bank’s Nigeria Development Update.
Minister of State for Finance, Taiwo Oyedele, said suggestions that funds are being “diverted” reflect a misunderstanding of Nigeria’s fiscal system.
“These interpretations misrepresent the World Bank’s analysis and reflect a misunderstanding of the fiscal system,” he said.
Oyedele in a statement he personally signed on Sunday clarifies that deductions by the Federation Account Allocation Committee (FAAC) are legitimate and not missing funds.
“The misreporting in question incorrectly characterises FAAC deductions as ‘waste’ or missing funds. This is incorrect,” he said.
He explained that the deductions cover statutory transfers, security spending, cost-of-collection, and allocations to states and government agencies.
“It is important to emphasise that refunds and transfers to states and other tiers of government are not leakages,” he added.
The minister also accused some commentators of relying on outdated data while ignoring ongoing reforms.
“Some commentaries selectively relied on past data while ignoring the forward-looking analysis and ongoing reforms,” he said.
According to him, recent measures, including an Executive Order on petroleum revenue remittance, are expected to improve transparency and increase revenues.
“The World Bank explicitly notes that reforms implemented in early 2026… are expected to improve transparency while increasing revenues available to all tiers of government,” he said.
Highlighting the broader outlook, Oyedele said the report points to improving economic conditions.
“Economic growth is becoming more broad-based… inflation is declining… and Nigeria’s external position has strengthened,” he said.
He maintained that the report does not suggest failure but calls for sustained reforms.
“The World Bank does not conclude that Nigeria’s fiscal system is collapsing… rather, it states that reforms are working,” he added.
The minister urged accurate reporting to avoid misleading narratives that could undermine public confidence in the economy.
