LunagisthubFG Rejects ‘Hidden Spending’ Claims in World Bank Report: Says Deductions Are Legal, Not Leakages
The Federal Government has pushed back on reports alleging hidden spending and diversion of federation revenue, calling them a misreading of the World Bank’s latest Nigeria Development Update.
In a statement Sunday, April 19, 2026, Minister of State for Finance Taiwo Oyedele said some media platforms wrongly portrayed statutory FAAC deductions as missing funds or leakages.
The Ministry of Finance said the confusion comes from misunderstanding how Nigeria’s fiscal structure works. Deductions from the Federation Account are not waste. They include:
| Type of Deduction | Purpose |
| Statutory transfers | Backed by law, shared to agencies and tiers of government |
| Savings and investments | Sovereign wealth and stabilization funds |
| Security-related expenditures | Funding for defence and internal security |
| Cost-of-collection charges | Revenue collection fees for FIRS, Customs, NUPRC |
| Refunds to MDAs | Repayments of obligations and over-deductions |
| Transfers to subnationals | Allocations and interventions for states and LGAs |
“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 ministry stated.
Oyedele faulted commentators for using outdated data and ignoring new reforms rolled out in 2026. The World Bank report itself acknowledged these changes.
A new Executive Order signed in early 2026 to safeguard remittance of petroleum revenues. The World Bank projects these reforms will boost transparency and raise distributable revenues to all tiers of government by about *0.4% of GDP annually.
Contrary to headlines suggesting fiscal distress, the ministry said the overall tone of the World Bank’s Nigeria Development Update was positive:
Nigeria’s economy is expanding beyond oil into other sectors.
Policy measures are starting to bring prices down.
Reserves are up and the country now has a current account surplus.
The FG says there is no “hidden spending” or diversion. FAAC deductions are legal fiscal processes, not leakages. With 2026 reforms already in motion, transparency and revenue sharing are set to improve.
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