FG refutes ‘Hidden spending’ claims in World Bank report

The federal government has dismissed media reports alleging the "diversion" of federation earnings, clarifying that the funds in question represent legitimate fiscal obligations rather than "hidden spending" or leakages.

In a statement released on Sunday, the Minister of State for Finance, Taiwo Oyedele, clarified that the narrative suggesting a significant portion of federation earnings is being siphoned away stems from a misunderstanding of the World Bank’s analysis.

The Ministry noted that characterizing Federation Account Allocation Committee (FAAC) deductions as "waste" or missing funds is a factual error.

"These interpretations misrepresent the World Bank’s analysis and reflect a misunderstanding of the fiscal system," Oyedele stated, adding that the deductions in question represent legitimate fiscal flows.

The Ministry noted that the funds mentioned in the World Bank report encompass statutory transfers, savings, investments, and security-related expenditures.

These figures also include cost-of-collection charges, refunds to Ministries, Departments, and Agencies (MDAs), and interventions specifically designed to benefit subnational governments.

The statement made it clear that refunds and transfers to states and other tiers of government are not leakages, but rather repayments of obligations and allocations backed by law.

The government pointed out that some public commentaries have selectively used historical data while ignoring the current trajectory of public financial management.

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According to the Ministry, the World Bank acknowledges that reforms initiated in early 2026 are already yielding results.

Specifically, a recently signed Executive Order aimed at safeguarding the remittance of petroleum revenues is expected to increase available revenue for all tiers of government by approximately 0.4% of GDP annually.

"The World Bank explicitly notes that reforms implemented in early 2026 are already addressing concerns around deductions, and are expected to improve transparency," the report stated. The Ministry cautioned that focusing on isolated aspects of the analysis without acknowledging these progressive measures provides a distorted view of the economy.

The Federal Government maintained that the broader message from the World Bank is one of optimism. The Ministry pointed to evidence that economic growth is becoming more broad-based across various sectors and that inflation, though still high, is on a downward trend because of deliberate policy actions.

The statement also drew attention to Nigeria’s strengthened external position, citing improved reserves and a current account surplus. For the first time in over a decade, Nigeria has seen a decline in its debt-to-GDP ratio, a development the Ministry attributes to current macroeconomic policies.

"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 to translate macroeconomic gains into inclusive growth," the statement continued.

The Ministry concluded by urging stakeholders and the media to engage with fiscal data responsibly to maintain confidence in the country's economic outlook. It noted that the government remains committed to revenue mobilization and efficient public spending but warned that "twisted interpretations" could undermine reform efforts and fuel public discord.

"An accurate understanding and responsible reporting of fiscal information are critical to maintaining confidence in Nigeria’s reform trajectory," the Ministry stated.