The Federal Ministry of Finance has dismissed recent claims alleging the diversion of federation revenue, describing them as a misinterpretation of findings contained in the latest Nigeria Development Update by the World Bank.
In a statement issued on April 19, the Minister of State for Finance, Taiwo Oyedele, said reports suggesting that government earnings were being “hidden” or mismanaged stem from a misunderstanding of the country’s fiscal framework.
“These interpretations misrepresent the World Bank’s analysis and reflect a misunderstanding of the fiscal system,” Oyedele stated.
He explained that deductions referenced in the report by the Federation Account Allocation Committee (FAAC) were legitimate fiscal operations and not evidence of waste or missing funds.
According to him, such deductions cover statutory transfers, savings, security-related expenditures, cost-of-collection charges, as well as refunds and interventions to Ministries, Departments and Agencies (MDAs) and subnational governments.
“Refunds and transfers to states and other tiers of government are not leakages. They represent legitimate fiscal flows backed by law,” he said.
The ministry also accused some commentators of selectively using outdated data while ignoring ongoing fiscal reforms highlighted in the report.
Oyedele noted that recent policy measures, including an Executive Order aimed at safeguarding petroleum revenue remittances, are already improving transparency and are projected to boost distributable revenue by about 0.4 per cent of GDP annually.
“Misinterpreting one aspect of the analysis without acknowledging ongoing reforms gives a distorted picture of Nigeria’s fiscal position,” he added.
The statement further highlighted improvements in Nigeria’s macroeconomic outlook, citing broader economic growth, declining inflation, stronger external reserves, and a current account surplus.
It also noted progress in debt sustainability, including a reduction in the country’s debt-to-GDP ratio for the first time in over a decade.
“The broader message of the report is positive and forward-looking. Reforms are working and must be sustained to achieve inclusive growth,” Oyedele said.
The ministry stressed that the World Bank report does not suggest a failing fiscal system but rather encourages the continuation and deepening of ongoing reforms.
Reaffirming the government’s commitment to transparency and accountability, Oyedele urged stakeholders and media organisations to engage responsibly with fiscal data.
“Accurate understanding and responsible reporting of fiscal information are critical to maintaining confidence in Nigeria’s reform trajectory,” he said.
The Federal Government reiterated its resolve to enhance revenue mobilisation, improve public spending efficiency, and sustain reforms aimed at driving inclusive economic growth.