FG Denies Claims of Federation Revenue Diversion
The Federal Government has rejected allegations of hidden spending and diversion of federal revenue, stating that such claims misinterpret the World Bank’s latest Nigeria Development Update.
In a statement issued in Abuja on Sunday, the Minister of State for Finance, Taiwo Oyedele, said media reports suggesting that a large portion of federation earnings was being diverted were inaccurate and stemmed from a misunderstanding of Nigeria’s fiscal framework.
Oyedele explained that deductions by the Federation Account Allocation Committee, which some reports described as wasteful or unaccounted for, are lawful and form part of standard public finance operations.
He noted that these deductions cover statutory transfers, savings and investments, security expenditures, cost-of-collection charges, refunds to Ministries, Departments and Agencies, as well as transfers and interventions that benefit states and other subnational governments.
According to the minister, refunds and allocations to states and other tiers of government should not be seen as leakages, as they are legitimate fiscal transactions, including repayments of obligations and legally backed disbursements.
Oyedele also criticised what he termed the selective use of outdated data in some analyses, stressing that the World Bank report recognised ongoing reforms aimed at enhancing transparency and increasing revenue generation.
He added that reforms introduced in early 2026, including a new Executive Order to ensure proper remittance of petroleum revenues, are already addressing concerns about deductions and are expected to boost revenue available to all tiers of government by about 0.4 per cent of Gross Domestic Product annually.
Highlighting the report’s broader outlook, Oyedele said Nigeria’s economy is showing signs of recovery, with growth becoming more widespread across sectors, inflation easing gradually, and the country’s external position improving through stronger reserves and a current account surplus.
He further stated that key debt indicators have improved, including a reduction in the debt-to-GDP ratio for the first time in over a decade.
“The World Bank does not conclude that Nigeria’s fiscal system is collapsing or that reforms have failed. Rather, it affirms that reforms are working and should be sustained to achieve inclusive growth,” the statement said.
The Federal Government reaffirmed its commitment to fiscal transparency, improved revenue mobilisation, and efficient public spending, while urging the media and stakeholders to interpret fiscal data responsibly to avoid undermining public confidence in ongoing reforms.
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