The Federal Ministry of Finance has dismissed claims that a significant portion of Nigeria’s revenue is missing or diverted, describing such reports as a misinterpretation of the World Bank’s latest Nigeria Development Update.
In a statement issued on Sunday, the Minister of State for Finance, Taiwo Oyedele, said assertions suggesting “hidden spending” or diversion of funds were inaccurate and reflected a misunderstanding of the country’s fiscal framework.
According to the ministry, deductions from the Federation Account Allocation Committee (FAAC) were wrongly portrayed as waste or missing funds.
“It is important to emphasise that refunds and transfers to states and other tiers of government are not leakages. They represent legitimate fiscal flows, including repayments of obligations and statutorily backed allocations,” Oyedele said.
It clarified that such deductions cover legitimate expenditures, including statutory transfers, security spending, savings and investments, cost-of-collection charges, refunds to Ministries, Departments and Agencies, MDAs, as well as transfers and interventions for states and other tiers of government.
The statement stressed that refunds and allocations to subnational governments are lawful fiscal transactions and should not be interpreted as leakages.
The ministry also faulted what it described as the selective use of outdated data in some commentaries, noting that the World Bank report highlighted ongoing public financial management reforms.
It pointed to measures introduced in early 2026, including an Executive Order aimed at improving the remittance of petroleum revenues, which are expected to boost transparency and increase distributable revenue by about 0.4 per cent of GDP annually.
Highlighting broader findings of the report, the ministry said Nigeria’s economic outlook remains positive, with growth becoming more broad-based, inflation gradually declining, and external reserves improving alongside a current account surplus. It added that debt indicators have also strengthened, including a reduction in the debt-to-GDP ratio.
The ministry maintained that the World Bank report does not suggest a collapse of Nigeria’s fiscal system but instead indicates that ongoing reforms are yielding results and should be sustained.
