The Federal Government has pushed back against claims suggesting there is “hidden spending” within Nigeria’s federation revenues, following interpretations of a recent World Bank report. In a statement released on Sunday by the Federal Ministry of Finance, the government described the allegations as a misreading of the report’s findings on fiscal flows and revenue allocation.
According to the ministry, the controversy stems from misunderstandings of the World Bank’s Nigeria Development Update, particularly in relation to deductions made by the Federation Account Allocation Committee (FAAC). It stressed that these deductions are not secretive or diverted funds, but part of Nigeria’s established and transparent fiscal structure.
The government explained that FAAC deductions cover legally approved obligations such as statutory transfers, security spending, cost-of-collection charges, savings, and refunds to government agencies. It added that all transactions are properly documented within the federation account system, dismissing claims of missing or unaccounted revenue as incorrect.
Responding to concerns about revenue management, the ministry rejected suggestions of widespread diversion of funds, noting that ongoing fiscal reforms are already strengthening transparency and improving public finance systems. It also referenced policy measures, including an Executive Order on petroleum revenue remittances, which it says is boosting accountability and increasing funds available for distribution to all levels of government.
While the government maintains that Nigeria’s fiscal system is improving, the debate follows recent public comments by political figures, including Peter Obi, who raised concerns about revenue retention and accountability. The Federal Government, however, insists that the World Bank report actually presents a positive economic outlook, highlighting growth improvements, easing inflation, and stronger reserves—signaling that ongoing reforms are beginning to yield results.
source: nairametrics