By BONIFACE AKARAH

The Federal Government has dismissed claims of alleged diversion and “hidden spending” of federation revenue, stating that recent interpretations of the World Bank’s Nigeria Development Update are misleading and inaccurate.

Minister of State for Finance, Taiwo Oyedele, in a statement on Sunday, said the reports “misrepresent the World Bank’s analysis and reflect a misunderstanding of the fiscal system.”

“The attention of the Federal Ministry of Finance has been drawn to recent media reports and commentaries that misrepresent the findings of the latest Nigeria Development Update by the World Bank,” Oyedele said.

He stressed that claims suggesting that a significant portion of federation earnings is being diverted are unfounded, adding that “these interpretations misrepresent the World Bank’s analysis and reflect a misunderstanding of the fiscal system.”

Addressing concerns around Federation Account Allocation Committee (FAAC) deductions, the minister clarified that such deductions are legitimate and not indicative of financial leakages.

“The misreporting in question incorrectly characterises FAAC deductions as ‘waste’ or missing funds. This is incorrect,” he stated.

Oyedele explained that the deductions cover statutory transfers, savings and investments, security-related expenditures, cost-of-collection charges, refunds to Ministries, Departments and Agencies, as well as transfers benefiting subnational governments.

“It is important to emphasise that refunds and transfers to states and other tiers of government are not leakages. They represent legitimate fiscal flows, including repayments of obligations and statutorily backed allocations,” he added.

The minister also accused some commentators of relying on outdated data while ignoring recent reforms captured in the World Bank report.

“Some commentaries selectively relied on past data while ignoring the forward-looking analysis and ongoing public financial management reforms highlighted in the report,” he said.

According to him, the World Bank acknowledged reforms implemented in early 2026, including an executive order aimed at safeguarding petroleum revenue remittances.

“The report notes that these reforms are already addressing concerns around deductions and are expected to improve transparency while increasing revenues available to all tiers of government by about 0.4 per cent of GDP annually,” Oyedele stated.

Highlighting broader economic indicators, the minister described the report as largely positive.

“The broader message of the World Bank report is positive and forward-looking. Economic growth is becoming more broad-based across sectors, inflation is declining due to deliberate policy actions, and Nigeria’s external position has strengthened significantly,” he said.

He added that debt indicators have also improved, noting “a decline in the debt-to-GDP ratio for the first time in over a decade.”

Oyedele maintained that the World Bank did not conclude that Nigeria’s fiscal system is collapsing, but rather that reforms are yielding results.

“The World Bank does not conclude that Nigeria’s fiscal system is collapsing or that reforms have failed. Rather, it states that reforms are working and must be sustained and deepened,” he said.

The Federal Government reaffirmed its commitment to fiscal transparency and responsible economic management.

“The government remains committed to strengthening fiscal transparency, improving revenue mobilisation, ensuring efficient public spending, and deepening reforms to support inclusive economic growth,” Oyedele added.

He urged the media and stakeholders to report fiscal matters responsibly.

“An accurate understanding and responsible reporting of fiscal information are critical to maintaining confidence in Nigeria’s reform trajectory. We urge stakeholders and the media to avoid twisted interpretations that may undermine reform efforts,” he said.

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