By Cross Udo, Abuja
The Federal Ministry of Finance has dismissed claims that the World Bank indicted Nigeria over alleged “hidden spending,” describing such interpretations as misleading and inaccurate.
In a statement on Sunday, the Minister of State for Finance, Taiwo Oyedele, said recent reports misrepresented findings from the World Bank’s Nigeria Development Update.
“The World Bank did not conclude that federation revenues were being diverted or that there is ‘hidden spending’ in Nigeria’s fiscal system. These interpretations are incorrect and reflect a misunderstanding of the report,” the Minister stated.
The ministry clarified that deductions by the Federation Account Allocation Committee (FAAC) had been wrongly labelled as waste or missing funds in some commentaries, stressing that such claims ignore the legal and fiscal framework guiding revenue distribution.
“FAAC deductions include statutory transfers, savings and investments, security-related expenditures, cost-of-collection charges, and refunds to MDAs, as well as transfers benefiting subnational governments. These are legitimate fiscal flows, not leakages,” Oyedele explained.
He further noted that refunds and transfers to states and other tiers of government should not be misconstrued as losses, as they represent lawful obligations, including repayments and constitutionally backed allocations meant to support governance at multiple levels.
According to the statement, some analysts relied on outdated data while ignoring recent reforms already acknowledged by the World Bank, including measures to improve transparency and revenue remittances.
“The World Bank recognises that reforms implemented in early 2026, including the Executive Order on petroleum revenue remittance, are already addressing concerns and are expected to increase revenues available to all tiers of government,” he added.
Oyedele said the reforms are projected to raise distributable revenues by about 0.4 per cent of Gross Domestic Product annually, a development he described as a significant step toward strengthening Nigeria’s fiscal sustainability.
The ministry further noted that the report’s overall message was positive and forward-looking, highlighting improvements across key macroeconomic indicators.
“Economic growth is becoming more broad-based across sectors, inflation—though still elevated—is declining due to deliberate policy actions, and Nigeria’s external position has strengthened significantly with improved reserves and a current account surplus,” Oyedele said.
He added that debt indicators have also improved, including a decline in the debt-to-GDP ratio — the first in over a decade — reflecting the impact of ongoing reforms and prudent fiscal management.
Oyedele emphasised that the World Bank did not suggest Nigeria’s fiscal system was failing but rather encouraged sustained and deepened reforms to consolidate gains and translate macroeconomic stability into inclusive growth.
“The report does not say Nigeria’s fiscal system is collapsing or that reforms have failed. Rather, it affirms that reforms are working and should be sustained,” he noted.
The Federal Government reaffirmed its commitment to strengthening fiscal transparency, improving revenue mobilisation, and ensuring efficient public spending, as part of broader efforts to drive inclusive economic growth.
The ministry also urged the media, analysts, and stakeholders to engage more responsibly with fiscal data to avoid misinterpretations that could undermine public confidence.
“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 to avoid twisted interpretations that may fuel public discord,” the Minister said.
