Finance Minister Oyedele Rejects Claims of Federal Revenue Diversion
The Minister of State for Finance, Taiwo Oyedele, has firmly dismissed recent claims suggesting that a significant portion of Nigeria's federation earnings is being "diverted" or constitutes "hidden spending." In a statement issued on Sunday, Oyedele described these allegations as a misrepresentation of the World Bank's analysis, attributing them to a fundamental misunderstanding of the country's fiscal system.
Clarifying FAAC Deductions
Oyedele emphasized that the claims incorrectly characterize deductions made by the Federation Account Allocation Committee (FAAC) as "waste" or missing funds. He outlined that FAAC deductions, as detailed 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 but represent legitimate fiscal flows, including repayments of obligations and statutorily backed allocations.
Highlighting Ongoing Reforms
Oyedele criticized the claims for selectively relying on past data while ignoring the forward-looking analysis and ongoing public financial management reforms highlighted in the World Bank report. He quoted the report, stating, "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."
He argued that misinterpreting one aspect of the analysis without acknowledging the progressive reforms and measures introduced to enhance distributable federation revenues gives a distorted picture of Nigeria's fiscal health.
Positive Economic Indicators
The minister highlighted that the broader message of the World Bank report is positive and forward-looking. He noted that economic growth is becoming more broad-based across sectors, and inflation, while still elevated, is declining due to deliberate policy actions. The report also 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 such decline 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.
Commitment to Fiscal Transparency
Oyedele asserted that the real message from 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," he said.
He expressed the Federal Government's commitment to strengthening fiscal transparency, improving revenue mobilization, 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 organizations, and the public to engage constructively with fiscal information and avoid twisted interpretations that may undermine reform efforts and fuel public discord," the minister concluded.
