FG debunks ‘hidden spending’ claims, clarifies FAAC deductions
Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Mr. Taiwo Oyedele
Abdullateef Fowewe
Nigeria’s Federal Ministry of Finance has dismissed claims of hidden spending and diversion of federation revenue, describing recent media interpretations of the World Bank’s Nigeria Development Update as misleading and inaccurate.
In a statement issued on Sunday, the Honourable Minister of State for Finance, Taiwo Oyedele, said the reports misrepresented the World Bank’s findings and reflected a misunderstanding of Nigeria’s fiscal system.
The ministry specifically addressed claims surrounding deductions by the Federation Account Allocation Committee (FAAC), noting that such deductions had been wrongly described as waste or missing funds.
According to the statement, FAAC deductions comprise statutory transfers, savings and investments, security-related expenditures, cost-of-collection charges, refunds to Ministries, Departments and Agencies (MDAs), as well as transfers and interventions that benefit subnational governments.
It emphasised that refunds and allocations to states and other tiers of government are legitimate fiscal flows and not leakages, as suggested in some reports.
The ministry also faulted the selective use of outdated data in certain commentaries, stating that such interpretations ignored recent reforms and forward-looking analysis contained in the World Bank report.
It pointed out that reforms introduced in early 2026, including a newly signed Executive Order aimed at safeguarding the remittance of petroleum revenues, are already addressing concerns around deductions.
These measures, it added, are expected to enhance transparency and increase revenues available to all tiers of government by about 0.4 per cent of Gross Domestic Product (GDP) annually.
Highlighting broader economic trends, the ministry said the World Bank report presented a positive outlook for Nigeria’s economy, with growth becoming more broad-based across sectors.
It noted that inflation, though still elevated, is on a downward trend due to deliberate policy actions, while the country’s external position has improved significantly, supported by stronger reserves and a current account surplus.
The statement further indicated that debt indicators have improved, including a decline in the debt-to-GDP ratio for the first time in over a decade.
The ministry stressed that the World Bank did not conclude that Nigeria’s fiscal system is failing, but rather acknowledged that ongoing reforms are yielding results and should be sustained.
It reaffirmed the Federal Government’s commitment to strengthening fiscal transparency, improving revenue mobilisation, ensuring efficient public spending, and deepening reforms to support inclusive economic growth.
The ministry urged stakeholders, media organisations and the public to engage responsibly with fiscal information to avoid misinterpretations that could undermine ongoing reforms and public confidence.
