The Federal Ministry of Finance has clarified that people misinterpreted the World Bank’s latest Nigeria Development Update.
It also rejected claims that large amounts of Nigeria’s revenue are lost or misappropriated.
Minister of State for Finance Taiwo Oyedele said in a statement on Sunday that claims of “hidden spending” or fund diversion are false and reflect a misunderstanding of the country’s fiscal structure.
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The government added that critics misrepresented deductions from the Federation Account Allocation Committee (FAAC) as waste or missing funds.
Oyedele said, “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”
It also clarified that these deductions include legitimate expenses such as statutory transfers, security expenditures, savings and investments, cost-of-collection fees, refunds to MDAs, Ministries, Departments, and Agencies, and transfers and interventions for states and other levels of government.
The statement further emphasised that allocations and reimbursements to subnational governments are legitimate fiscal operations and should not be seen as leakages.
The ministry also criticised what it called the selective use of out-of-date statistics in some commentary. It further noted that the World Bank study emphasised continuing public financial management changes.
It cited actions taken in early 2026, such as an Executive Order to enhance petroleum revenue remittance, which are anticipated to improve transparency and raise distributable revenue by roughly 0.4% of GDP each year.
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The ministry highlighted the report’s broader conclusions, stating that Nigeria’s economic prognosis is still favourable, with growth becoming more widespread, inflation steadily falling, and improving external reserves in addition to a current account surplus. Additionally, it stated that debt metrics, such as the debt-to-GDP ratio, had improved.
The ministry further insisted that the World Bank research shows that ongoing reforms are working and should be continued rather than implying that Nigeria’s fiscal system is collapsing.
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