The Federal Ministry of Finance has dismissed reports alleging that a significant portion of federation earnings is being “diverted” or spent secretly, describing such interpretations as a misrepresentation of the World Bank’s latest Nigeria Development Update.
In a press statement issued Saturday, April 18, 2026, and signed by the Minister of State for Finance, Taiwo Oyedele, the ministry said recent media commentaries had wrongly characterised Federation Account Allocation Committee (FAAC) deductions as “waste” or missing funds.
“These interpretations misrepresent the World Bank’s analysis and reflect a misunderstanding of the fiscal system,” the statement read.
The ministry explained 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 Ministries, Departments and Agencies (MDAs), as well as transfers and interventions benefiting subnational governments.
“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.
The statement also faulted what it called the “selective use of outdated data” by some commentaries, noting that the World Bank report acknowledged ongoing public financial management reforms. Among these is an Executive Order signed in early 2026 to safeguard the remittance of petroleum revenues. According to the ministry, the World Bank indicated that such reforms are already addressing concerns around deductions and are expected to increase revenues available to all tiers of government by about 0.4% of GDP annually.
“Misinterpreting one aspect of the analysis without acknowledging the progressive reforms and measures already introduced to enhance distributable federation revenues gives a distorted picture,” the ministry stated.
Highlighting what it described as the “broader message” of the World Bank report, the ministry said Nigeria’s macroeconomic fundamentals are strengthening. The report, it noted, showed that economic growth is becoming more broad-based across sectors, while inflation, though still elevated, is declining due to deliberate policy actions.
Nigeria’s external position has also improved, the ministry said, citing stronger reserves and a current account surplus. Debt indicators have equally improved, with the debt-to-GDP ratio recording its first decline in over a decade.
“These developments reflect the outcomes of the current administration’s ongoing macroeconomic policies and public financial management reforms,” Oyedele said.
The ministry stressed that the World Bank “does not conclude that Nigeria’s fiscal system is collapsing or that reforms have failed.” Rather, it said, the report affirms that reforms are working and must be sustained and deepened to translate macroeconomic gains into inclusive growth.
Reaffirming the Federal Government’s commitment to fiscal transparency, improved revenue mobilisation, and efficient public spending, the ministry urged stakeholders and the media to engage constructively with fiscal information.
“An accurate understanding and responsible reporting of fiscal information are critical to maintaining confidence in Nigeria’s reform trajectory and economic outlook,” the statement said. “We urge stakeholders, media organisations, and the public to avoid twisted interpretations that may undermine reform efforts and fuel public discord.”
