Nigeria’s Federal Government has rejected claims that earnings from the federation account are being diverted, insisting that media reports have misread the findings of a World Bank assessment and presented legitimate fiscal deductions as evidence of hidden spending.
In a statement signed by Taiwo Oyedele, Minister of State for Finance, the ministry said some reports on the Nigeria Development Update (NDU) were describing Federation Account Allocation Committee (FAAC) deductions as diversion of revenue or hidden spending, whereas the World Bank attributed those deductions to statutory transfers, savings and investments, and security-related expenditures, among other legitimate fiscal obligations.
The ministry stated that FAAC deductions cover statutory transfers, savings and investments, security-related expenditures, cost-of-collection charges, refunds to Ministries, Departments and Agencies (MDAs), as well as transfers and interventions benefiting subnational governments, and that these flows are backed by law and reflect existing fiscal obligations.
The statement added: “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.”
The government also accused some commentators of selectively relying on outdated data. The ministry said some commentaries ignored forward-looking aspects of the report, including reforms implemented in early 2026, such as an Executive Order to safeguard remittance of petroleum revenues, which the World Bank said could improve transparency and increase distributable revenue to all tiers of government by about 0.4 percent of gross domestic product (GDP) annually.
The ministry also pointed to broader economic improvements cited in the World Bank report, including more broad-based economic growth, declining inflation, improved external reserves, and a current account surplus. It noted improvements in debt indicators, including a decline in the debt-to-GDP ratio described as the first in over a decade.
The controversy around the report carries an additional dimension. The World Bank deleted the Nigeria Development Update from its website on April 10, three days after its release, a move that has not been publicly explained by either the Bank or the Nigerian government.
The ministry reiterated that the World Bank did not conclude Nigeria’s fiscal system was failing, but rather affirmed that reforms are yielding results and should be sustained. It urged the media and public to engage responsibly with fiscal information, warning that misinterpretation could undermine confidence in ongoing economic reforms.
