By By Elizabeth Ugbo
The Federal Ministry of Finance has dismissed claims of revenue diversion in Nigeria, stating on Monday in Abuja that recent reports misinterpreted findings by the World Bank. The ministry explained who made the claims, what was alleged, when and where the issue arose, why the claims are inaccurate, and how the fiscal system actually works.
Ministry Rejects “Hidden Spending” Narrative
The ministry firmly rejected reports suggesting widespread diversion of federation revenue. It said such interpretations distort the actual findings of the World Bank’s Nigeria Development Update.
According to officials, the report does not conclude that Nigeria’s fiscal system is collapsing. Instead, it highlights progress while recommending sustained reforms.
Nigeria’s External Position Shows Improvement
The ministry stated that Nigeria’s external position has strengthened significantly. It cited improved foreign reserves and a current account surplus.
In addition, debt indicators have improved. Notably, the country’s debt-to-GDP ratio has declined for the first time in over a decade.
These developments, the ministry noted, reflect the impact of ongoing macroeconomic reforms and better public financial management.
Reforms Working but Need Sustained Effort
The ministry clarified that the World Bank acknowledged ongoing reforms. However, it stressed that these reforms must continue to achieve inclusive growth.
Officials explained that macroeconomic gains must translate into real benefits for citizens. Therefore, the government plans to deepen reforms across key sectors.
Government Reaffirms Commitment to Fiscal Transparency
The Federal Government reiterated its commitment to strengthening fiscal transparency. It also pledged to improve revenue mobilisation and ensure efficient public spending.
Furthermore, the ministry emphasised the importance of accurate reporting. It warned that misinterpretation could weaken public confidence in Nigeria’s economic outlook.
FAAC Deductions Are Legitimate Fiscal Obligations
Addressing concerns about Federation Account Allocation Committee (FAAC) deductions, the ministry provided clarification. It stated that these deductions are lawful and necessary.
They cover statutory transfers, security expenditures, and cost-of-collection charges. They also include refunds to Ministries, Departments, and Agencies (MDAs).
Additionally, transfers to states and other tiers of government represent valid fiscal flows. The ministry stressed that these do not amount to leakages.
Misreporting and Outdated Data Criticised
The ministry criticised some analyses for using outdated data. It noted that such reports ignore recent reforms and forward-looking components of the World Bank report.
Officials pointed out that a new Executive Order signed in early 2026 aims to improve petroleum revenue remittance. This reform is expected to boost transparency and increase government revenue.
According to estimates, the reform could raise revenues by about 0.4 percent of GDP annually.
Taiwo Oyedele Addresses Misinterpretation
The Minister of State for Finance, Taiwo Oyedele, also addressed the issue. He said claims of “hidden spending” stem from a misunderstanding of Nigeria’s fiscal structure.
He explained that such assertions misrepresent how public finance operates in the country. Therefore, he urged stakeholders to engage constructively with accurate fiscal data.
Outlook Remains Positive
The ministry described Nigeria’s economic outlook as positive and forward-looking. It noted that growth is becoming more broad-based across sectors.
Although inflation remains high, it is gradually declining due to policy measures. This trend signals improving economic stability.
Conclusion
In conclusion, the Federal Ministry of Finance maintained that Nigeria’s fiscal reforms are on track. It urged media organisations and stakeholders to avoid misleading narratives.
The ministry emphasised that balanced and accurate reporting remains crucial for sustaining economic confidence.
