The Federal Ministry of Finance has officially addressed and refuted recent media reports alleging hidden spending and the diversion of federation revenue. In a strongly worded statement, the Ministry clarified that these claims stem from a fundamental misinterpretation of the Nigeria Development Update recently released by the World Bank.
The Ministry emphasized that characterizing standard fiscal processes as leakages is not only inaccurate but also undermines the public’s understanding of the country’s financial systems.
Clarifying FAAC Deductions
One of the primary points of contention addressed was the reporting on Federation Account Allocation Committee (FAAC) deductions. The Ministry explained that these deductions are not missing funds but are statutory and transparent financial obligations.
According to the Ministry, these legitimate flows include statutory transfers, savings and investments, security-related expenditures, and cost-of-collection charges. Furthermore, the Ministry clarified that refunds to Ministries, Departments, and Agencies (MDAs) and transfers to subnational governments are essential fiscal mechanisms, not evidence of waste.
Addressing Outdated Data and Policy Reforms
The government expressed concern over the selective use of outdated data in recent commentaries. The Minister of State for Finance, Taiwo Oyedele, pointed out that the World Bank report actually highlights significant forward-looking reforms implemented in early 2026.
“The recently signed Executive Order to safeguard the remittance of petroleum revenues is already addressing concerns around deductions,” the Ministry stated. These reforms are projected to improve transparency and increase revenues for all tiers of government by approximately 0.4% of GDP annually.
Macroeconomic Gains and Reform Stability
Despite the controversial headlines, the Ministry maintained that the broader message of the World Bank’s report is overwhelmingly positive. The report indicates that Nigeria’s economic growth is becoming more broad-based, and while inflation remains a challenge, it is currently on a downward trend due to deliberate policy interventions.
The statement further highlighted that Nigeria’s external position has strengthened, resulting in a current account surplus and improved foreign reserves. Notably, the country has seen a decline in the debt-to-GDP ratio for the first time in over a decade, signaling stronger macroeconomic fundamentals.
A Call for Responsible Reporting
The Federal Government reiterated its commitment to fiscal transparency and efficient public spending, asserting that the current reforms are working and must be sustained to ensure inclusive growth.
“An accurate understanding and responsible reporting of fiscal information are critical to maintaining confidence in Nigeria’s reform trajectory,” the statement read. The Ministry urged the media and all stakeholders to engage constructively with official data and avoid “twisted interpretations” that could fuel public discord or jeopardize the nation’s economic outlook.
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