The Federal Government has dismissed claims that funds from the federation account are being diverted, insisting that deductions by the Federation Account Allocation Committee (FAAC) are legitimate and properly accounted for.
In a statement, the Minister of State for Finance, Taiwo Oyedele, said recent interpretations of the World Bank Nigeria Development Update were misleading.
According to him, some reports wrongly described FAAC deductions as “leakages” or hidden spending, contrary to the World Bank’s actual findings.
“The interpretations misrepresent the World Bank’s analysis and reflect a misunderstanding of Nigeria’s fiscal system,” the ministry stated.
The government explained that the deductions referenced in the report cover statutory transfers, savings, security expenditures, cost-of-collection charges, and refunds to Ministries, Departments and Agencies.
It stressed that these are legitimate fiscal obligations, including allocations to subnational governments, and should not be classified as missing funds.
The ministry also faulted what it described as selective reporting, noting that positive aspects of the World Bank report were largely ignored.
According to the government, the World Bank acknowledged that recent reforms would enhance transparency and increase revenue available to all tiers of government.
The ministry highlighted that new fiscal measures introduced in 2026, including an executive order to improve petroleum revenue remittance, are already addressing concerns around deductions.
It added that the reforms are expected to boost distributable revenue by about 0.4 per cent of GDP annually.
Beyond revenue concerns, the government said the report pointed to broader economic improvements, including declining inflation, stronger external reserves, and a current account surplus.
It also noted an improvement in Nigeria’s debt indicators, with a reduction in the debt-to-GDP ratio recorded for the first time in over a decade.
The Federal Government maintained that the World Bank’s overall conclusion was positive, emphasising that ongoing reforms are yielding results and should be sustained.
It reiterated its commitment to strengthening fiscal transparency, improving revenue mobilisation, and ensuring efficient public spending.
The ministry urged stakeholders and the media to interpret fiscal data responsibly to avoid undermining public confidence in ongoing economic reforms.
