- Safiu Kehinde
The Ministry of Finance has debunked the alleged spending and diversion of the federation’s revenue.
This is coming under the heels of media reports emerging from the recently released World Bank’s analysis of Nigeria’s economic and fiscal development.
The reports had triggered allegations that significant portion of the federation’s earnings has been diverted through deductions by the Federal Account Allocation Committee (FAAC).
Reacting to the claims in a statement issued on Sunday, the Minister of State for Finance, Taiwo Oyedele, labelled the reports as incorrect and misrepresentation of the World Bank’s analysis.
Oyedele clarified that FAAC deductions are legitimate fiscal flow.
“These interpretations misrepresent the World Bank’s analysis and reflect a misunderstanding of the fiscal system.
“The misreporting in question incorrectly characterises Federation Account Allocation Committee (FAAC) deductions as “waste” or missing funds. This is incorrect.
“FAAC deductions, as presented in the World Bank report, include: Statutory transfers, Savings and investments, Security-related expenditures, Cost-of-collection charges, Refunds to Ministries, Departments and Agencies (MDAs), 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The Minister also faulted the reports over alleged usage of selective outdated materials while ignoring the World Bank’s analysis of the reforms implemented in 2026.
“Some commentaries selectively relied on past data while ignoring the forward-looking analysis and ongoing public financial management reforms highlighted in the report.
“The World Bank explicitly notes that reforms implemented in early 2026, including the recently signed Executive Order to safeguard remittance of petroleum revenues, are already addressing concerns around deductions, and are expected to improve transparency while increasing 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.” He said.
Oyedele held that the broader message of the World Bank report is positive and forward-looking in terms of economic growth and improvement of debt indicators.
“Economic growth is becoming more broad-based across sectors. Inflation, while still elevated, is declining due to deliberate policy actions.
“Nigeria’s external position has strengthened significantly, with improved reserves and a current account surplus. Debt indicators have improved, including a decline in the debt-to-GDP ratio, the first in over a decade. ” He said.
These developments, according to Oyedele, reflect the outcomes of the current administration’s ongoing macroeconomic policies and public financial management reforms.
Meanwhil, the Minister, in what he tagged the real message of the World Bank, noted that the organisation does not conclude that Nigeria’s fiscal system is collapsing or that reforms have failed.
Rather, the World Bank, according to him, states that the reforms are working and they must be sustained and deepened to translate macroeconomic gains into inclusive growth.
Oyedele reiterated the Federal Government’s commitment to fiscal transparency and efficient public spending.
He however urged media organisations and stakeholders to engage constructively with fiscal information.
“The Federal Government remains committed to strengthening fiscal transparency, improving revenue mobilisation, ensuring efficient public spending, and deepening reforms to support inclusive economic growth.
“An accurate understanding and responsible reporting of fiscal information are critical to maintaining confidence in Nigeria’s reform trajectory and economic outlook.
“We urge stakeholders, media organisations, and the public to engage constructively with fiscal information and avoid twisted interpretations that may undermine reform efforts and fuel public discord.” He said.