BY NKECHI NAECHE-ESEZOBOR—The Federal Ministry of Finance has dismissed recent media reports alleging that large portions of Nigeria’s federation revenue are being diverted or concealed, describing such claims as a misinterpretation of the latest Nigeria Development Update by the World Bank.
In a statement issued on Sunday, the ministry said the reports wrongly portrayed deductions by the Federation Account Allocation Committee (FAAC) as “waste” or missing funds, clarifying that these deductions are legitimate and part of established fiscal processes.
According to the ministry, FAAC deductions cover statutory transfers, savings and investments, security-related expenditures, cost-of-collection charges, and refunds to Ministries, Departments and Agencies (MDAs), as well as transfers to subnational governments.
“It is important to emphasise that refunds and transfers to states and other tiers of government are not leakages,” the statement said. “They represent legitimate fiscal flows, including repayments of obligations and statutorily backed allocations.”
The ministry also accused some commentators of selectively using outdated data while ignoring recent reforms highlighted in the World Bank report. It noted that measures introduced in early 2026—including a new Executive Order aimed at safeguarding petroleum revenue remittances—are already improving transparency and are expected to boost distributable revenue by about 0.4 percent of GDP annually.
Officials stressed that focusing narrowly on specific aspects of the report without acknowledging ongoing reforms presents a distorted picture of Nigeria’s fiscal position.
Highlighting the broader findings of the World Bank, the ministry described the report as largely positive, pointing to signs of strengthening macroeconomic fundamentals. These include more broad-based economic growth, declining inflation driven by policy measures, improved external reserves alongside a current account surplus, and a reduction in the debt-to-GDP ratio—the first in over a decade.
“The World Bank does not conclude that Nigeria’s fiscal system is collapsing or that reforms have failed,” the statement said. “Rather, it affirms that reforms are working and should be sustained.”
The Federal Government reiterated its commitment to enhancing fiscal transparency, improving revenue mobilisation, and ensuring efficient public spending to support inclusive economic growth.
It also urged the media and stakeholders to report fiscal matters responsibly, warning that misleading interpretations could undermine public confidence and disrupt ongoing reform efforts.
