The Federal Government has dismissed reports alleging the diversion of Federation Account revenues, insisting that deductions from the Federation Account Allocation Committee (FAAC) are lawful and do not amount to illegal or hidden spending.
In a statement, the Minister of State for Finance, Taiwo Oyedele, said claims that large portions of federation earnings are being siphoned off stem from a misinterpretation of recent analysis by the World Bank.
“These interpretations misrepresent the World Bank’s analysis and reflect a misunderstanding of the fiscal system,” he said.
Oyedele stressed that the deductions referenced in public discourse represent legitimate fiscal obligations, not leakages. He added that describing FAAC deductions as “waste” or missing funds is inaccurate.
According to him, the figures cited in the World Bank report cover lawful activities such as statutory transfers, savings, investments, and security-related expenditures. They also include cost-of-collection charges, refunds to ministries, departments, and agencies, as well as targeted interventions supporting sub-national governments.
The government emphasised that such refunds and transfers are legitimate repayments and allocations backed by existing laws and fiscal frameworks, not illegal deductions.
The statement noted that some commentaries relied on selective or outdated data, ignoring recent improvements in public financial management. Among these is a newly signed Executive Order aimed at strengthening petroleum revenue remittances, expected to increase distributable income by about 0.4 per cent of Gross Domestic Product annually.
“The World Bank explicitly notes that reforms implemented in early 2026 are already addressing concerns around deductions and are expected to improve transparency,” the statement said.
Oyedele warned that focusing on isolated aspects of the report without acknowledging corrective measures presents a distorted view of Nigeria’s fiscal position. He added that the broader message of the report highlights improving economic conditions, including more broad-based growth, easing inflation, stronger external reserves, and a current account surplus.
The statement also noted a decline in Nigeria’s debt-to-GDP ratio for the first time in over a decade, attributing it to ongoing macroeconomic reforms.
“The World Bank does not conclude that Nigeria’s fiscal system is collapsing or that reforms have failed. Rather, it states that reforms are working and must be sustained and deepened to translate macroeconomic gains into inclusive growth,” Oyedele said.
The Federal Government urged the media and stakeholders to interpret fiscal data responsibly to avoid undermining public confidence, reaffirming its commitment to improved revenue mobilisation and efficient public spending.
