Abuja — Nigeria’s Minister of State for Finance, Taiwo Oyedele, on Sunday dismissed claims of hidden spending and diversion of federation revenue as misinterpretations of the World Bank Nigeria Development Update. According to Oyedele, media reports misrepresented the World Bank’s findings due to a misunderstanding of Nigeria’s fiscal system, emphasizing that the report affirms ongoing fiscal reforms rather than fiscal collapse.
Minister of State for Finance Taiwo Oyedele said the deductions made by the Federation Account Allocation Committee (FAAC) are statutory transfers and not hidden or misappropriated funds, as some media reports have suggested. Oyedele explained that these deductions cover security spending, investments, the cost of revenue collection, and refunds to Ministries, Departments, and Agencies (MDAs). He added that the funds also include interventions for subnational governments and other legitimate fiscal obligations, all of which are backed by law and accounted for in Nigeria’s fiscal system.
“These reforms are expected to increase distributable revenue by 0.4% of gross domestic product (GDP) annually and address concerns surrounding deductions to enhance revenue flows to all tiers of government.”
Oyedele accused certain commentators and media outlets of misrepresenting the World Bank’s Nigeria Development Update by selectively using outdated data and ignoring recent fiscal reforms. He said these reports focused on isolated aspects of the fiscal system without acknowledging the progress made, resulting in a distorted view of Nigeria’s financial management. “Deductions by FAAC were wrongly labelled as waste or missing funds in some reports,” he said, stressing that the World Bank report does not conclude that Nigeria’s fiscal system is collapsing.
The minister emphasized that the World Bank’s report affirms ongoing fiscal reforms that are already yielding positive results. He highlighted an Executive Order implemented in early 2026 aimed at improving petroleum revenue remittances and transparency. According to Oyedele, these reforms are expected to increase distributable revenue by 0.4% of gross domestic product (GDP) annually and address concerns surrounding deductions to enhance revenue flows to all tiers of government. “Reforms implemented in early 2026 are already addressing concerns, and they must be sustained,” he said.
The World Bank’s Nigeria Development Update presents a positive economic outlook, noting broad-based growth across sectors, improvements in external reserves, and favorable debt indicators. The report also highlights a gradual decline in inflation and a strengthening current account surplus, which together improve Nigeria’s external position. However, it stresses that these macroeconomic gains need to be deepened to foster inclusive growth.
Oyedele urged a holistic view of the economic improvements highlighted in the World Bank report, cautioning against reading isolated fiscal data as evidence of large-scale diversion of funds. He said the ministry remains committed to transparency and accountability in managing federation revenue and continues to work with the World Bank and other partners to sustain fiscal reforms.
The Nigeria Development Update has been interpreted by some as indicating hidden spending, but officials maintain that this is a misreading of the report’s findings. The World Bank’s analysis acknowledges ongoing reforms and recommends their continuation to solidify Nigeria’s fiscal stability and growth prospects.
Nigeria’s fiscal system includes statutory deductions that are routinely made before revenue is distributed to states and local governments. These deductions include security allocations, investments in infrastructure, and the cost of revenue collection, which are all legally mandated and subject to oversight. Refunds to MDAs are also part of the deductions, reflecting adjustments rather than losses.
The Executive Order issued in early 2026 aims to improve the remittance process of petroleum revenues, which constitute a significant portion of Nigeria’s federal income. By enhancing transparency and efficiency in this area, the government expects to increase the distributable revenue available for allocation to subnational governments and other statutory obligations.
The World Bank report also notes that while inflation remains high, it is gradually declining, and the current account surplus is strengthening Nigeria’s external financial position. These indicators, combined with ongoing fiscal reforms, contribute to a more positive economic outlook for the country.
Officials said the ministry will continue to monitor fiscal developments and work with international partners to ensure Nigeria’s economic policies support sustainable growth and fiscal discipline. The government’s focus remains on deepening reforms, improving revenue collection, and ensuring that all statutory deductions are transparent and accounted for in accordance with Nigerian law.
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