The federal government has denied claims in certain quarters that a significant portion of federation earnings is being “diverted” or constitutes “hidden spending”.
CityNews reports that the denial was contained in a statement on Sunday by the Minister of State for Finance, Taiwo Oyedele.
According to him, the World Bank report on which the claims of diversion and hidden spending are being anchored is being misrepresented.
“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, particularly claims suggesting that a significant portion of federation earnings is being “diverted” or constitutes “hidden spending”.
“These interpretations misrepresent the World Bank’s analysis and reflect a misunderstanding of the fiscal system.
“The misreporting in question incorrectly characterises Federation Account Allocation Committee (FAAC) deductions as “waste” or missing funds. This is incorrect,” Oyedele said.
Recall that former presidential candidate, Peter Obi, had lamented that, despite rising earnings in Nigeria, the country is bleeding from within.
He made the statement via his account on Saturday, while reacting to a World Bank report that said Nigeria generated about ₦84 trillion in federation revenue over the past three years.
However, Obi lamented that there is massive revenue leakage going on in the country.
He alleged that 41 per cent of the amount, approximately ₦34.44 trillion, was not remitted to the Federation Account.
He noted that the figure exceeds the combined ₦34 trillion allocated for capital projects in the 2024 and 2025 Appropriation Bills, describing the comparison as a reflection of the scale of the issue
Oyedele, however, disagreed with the submission from Obi.
According to him, FAAC deductions, as presented in the World Bank report, include:
Statutory transfers,
Savings and investments,
Security-related expenditures,
Cost-of-collection charges,
Refunds to Ministries, Departments and Agencies (MDAs),
Transfers and interventions benefiting subnational governments.
He explained that refunds and transfers to states and other tiers of government are not leakages, but represent legitimate fiscal flows, including repayments of obligations and statutorily backed allocations.
Selective Use Of Data
The Minister accused some media outlets of intentionally misrepresenting the World Bank analysis.
In his words, “Some commentaries selectively relied on past data while ignoring the forward-looking analysis and ongoing public financial management reforms highlighted in the report.
“The World Bank explicitly notes that reforms implemented in early 2026, including the recently signed Executive Order to safeguard remittance of petroleum revenues, 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% of GDP annually.
“Misinterpreting one aspect of the analysis without acknowledging the progressive reforms and measures already introduced to enhance distributable federation revenues gives a distorted picture.”
The Minister argued that the broader message of the World Bank report is positive and forward-looking vis-a-vis:
Economic growth is becoming more broad-based across sectors.
Inflation, while still elevated, is declining due to deliberate policy actions.
Nigeria’s external position has strengthened significantly, with improved reserves and a current account surplus.
Debt indicators have improved, including a decline in the debt-to-GDP ratio, the first in over a decade.
These developments reflect the outcomes of the current administration’s ongoing macroeconomic policies and public financial management reforms.
He added that “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 they must be sustained and deepened to translate macroeconomic gains into inclusive growth.”
Oyedele stressed that the administration of President Bola Tinubu remains committed to strengthening fiscal transparency, improving revenue mobilisation, ensuring efficient public spending, and deepening reforms to support inclusive economic growth.
He urged stakeholders including media organizations to avoid presenting twisted reports to members of the public.
“An accurate understanding and responsible reporting of fiscal information are critical to maintaining confidence in Nigeria’s reform trajectory and economic outlook.
“We urge stakeholders, media organisations, and the public to engage constructively with fiscal information and avoid twisted interpretations that may undermine reform efforts and fuel public discord,” the statement concluded.
