The Minister of State for Finance, Taiwo Oyedele, has dismissed claims suggesting that a significant portion of federation earnings is being “diverted” or constitutes “hidden spending”.

In a statement on Sunday, Oyedele described the claims as a misrepresentation of World Bank’s analysis, adding that it reflected a misunderstanding of the fiscal system.

The minister said the claim incorrectly characterises Federation Account Allocation Committee (FAAC) deductions as “waste” or missing funds.

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.

The minister pointed out that refunds and transfers to states and other tiers of government are not leakages, emphasising that they represent legitimate fiscal flows, including repayments of obligations and statutorily backed allocations.

He said the claims 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,” Oyedele said.

He said 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 highlighted that the broader message of the World Bank report is positive and forward-looking, poinnting out that economic growth is becoming more broad-based across sectors. He said the report also showed that iInflation, while still elevated, is declining due to deliberate policy actions.

The report shows that Nigeria’s external position has strengthened significantly, with improved reserves and a current account surplus.

According to the World Bank, debt indicators have improved, including a decline in the debt-to-GDP ratio, the first in over a decade.

Oyedele stated that these developments reflect the outcomes of the current administration’s ongoing macroeconomic policies and public financial management reforms.

He said the real message passed by 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 said.

He expressed the Federal Government’s commitment to strengthening fiscal transparency, improving revenue mobilisation, ensuring efficient public spending, and deepening reforms to support inclusive economic growth.

“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 minister said.