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The ministry also accused some commentators of selectively using outdated data while ignoring recent reforms highlighted in the World Bank report.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.

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This was disclosed in a communiqué issued after the January meeting of the Federation Account Allocation Committee (FAAC).

The total distributable revenue comprised ₦1.084 trillion in statutory revenue, ₦846.507 billion from Value Added Tax (VAT), and ₦38.110 billion from the Electronic Money Transfer Levy (EMTL). FAAC reported that gross revenue of ₦2.585 trillion was available in December, with ₦104.697 billion deducted for collection costs and ₦511.585 billion for transfers, refunds, and savings.

For statutory revenue, the Federal Government received ₦520.807 billion, state governments got ₦264.160 billion, and LGs received ₦203.656 billion. In addition, ₦96.083 billion was shared among oil-producing states as derivation revenue.

From the ₦846.507 billion VAT revenue, the Federal Government received ₦126.976 billion, states ₦423.254 billion, and LGs ₦296.277 billion. The ₦38.110 billion EMTL revenue was shared with the Federal Government getting ₦5.717 billion, states ₦19.055 billion, and LGs ₦13.338 billion.

FAAC said gross statutory revenue of ₦1.631 trillion for December was lower than the ₦1.736 trillion recorded in November 2025. In contrast, VAT revenue rose sharply to ₦913.957 billion in December, up ₦350.915 billion from November.

The communiqué also noted changes in other revenue sources. Companies Income Tax, Import Duty, and VAT collections increased significantly, while Oil and Gas Royalty, CET levies, and fees rose slightly. Excise Duty, Petroleum Profit Tax, and EMTL collections declined during the month.

Overall, the Federal Government received ₦653.500 billion, state governments ₦706.469 billion, and LGs ₦513.272 billion from the December 2025 revenue. FAAC’s release provides a summary of the monthly distribution and highlights trends in Nigeria’s fiscal collections.

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From the stated amount inclusive of Gross Statutory Revenue, Value Added Tax (VAT), Electronic Money Transfer Levy (EMTL), Exchange Difference (ED), the Federal Government received N581.856 Billion, the States received N549.792 Billion, the Local Government Councils got N402.553 Billion, while the Oil Producing States received N193.291 Billion as Derivation, (13% of Mineral Revenue).

The sum of N103.307 Billion was given for the cost of collection, while N1.312 Trillion was allocated for Transfers Intervention and Refunds.

The Communique issued by the Federation Account Allocation Committee (FAAC) at the end of the meeting indicated that the Gross Revenue available from the Value Added Tax (VAT) for the month of November 2024, was N628.972 Billion as against N668.291 Billion distributed in the preceding month, resulting in a decreased of N39.318 Billion.

From that amount, the sum of N25.159 Billion was allocated for the cost of collection and the sum of N18.114 Billion given for Transfers, Intervention and Refunds. The remaining sum of N628.973 Billion was distributed to the three tiers of government, of which the Federal Government got N87.855 Billion, the States received N292.850 Billion and Local Government Councils got N204.995 Billion.

Accordingly, the Gross Statutory Revenue of N1.827 Trillion received for the month was higher than the sum of N1.336 Trillion received in the previous month by N490.339 Billion. From the stated amount, the sum of N77.521 Billion was allocated for the cost of collection and a total sum of N1.294 Trillion for Transfers, Intervention and Refunds.

The remaining balance of  N455.354 Billion was distributed as follows to the three tiers of government: Federal Government got the sum of N175.690 Billion, States received N89.113 Billion, the sum of N68.702 Billion was allocated to LGCs and N121.849 Billion was given to Derivation Revenue (13% Mineral producing States).

Also, the sum of N15.046 Billion from Electronic Money Transfer Levy (EMTL) was distributed to the three (3) tiers of government as follows: the Federal Government received N2.257 Billion, States got N7.523 Billion, Local Government Councils received N5.266 Billion, while N0. 0627 Billion was allocated for Cost of Collection.

The Communique also disclosed the sum of N671.392 Billion from Exchange Difference, which was shared as follows: Federal Government received N316.054 Billion, States got N160.306 Billion, the sum of N123.590 Billion was allocated to Local Government Councils, N71.442 Billion was given for Derivation (13% of Mineral Revenue).

Oil and Gas Royalty and CET levies recorded significant increases, while Excise Duty, Value Added Tax (VAT), Import Duty, Petroleum Profit Tax (PPT) and Companies Income Tax (CIT), Electronic Money Transfer Levy ( EMTL), decreased considerably.

According to the Communique, the total revenue distributable for the current month of November 2024, was drawn from Statutory Revenue of N455.354 Billion, Value Added Tax (VAT) of N585.700 Billion, N15.046 Billion from Electronic Money Transfer Levy (EMTL), and N671.392 Billion from Exchange Difference, bringing the total distributable amount for the month to N1.727 Trillion.

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