The Federal Government has dismissed reports alleging that federation revenues are being diverted or hidden, describing the claims as a misrepresentation of the World Bank’s latest Nigeria Development Update.
Minister of State for Finance, Taiwo Oyedele, said FAAC deductions are legitimate fiscal flows and not leakages. “It is important to emphasise that refunds and transfers to states and other tiers of government are not leakages,” he said.
He explained that FAAC deductions include statutory transfers, security-related spending, cost-of-collection charges, savings and investments, refunds to ministries, departments and agencies, and transfers to subnational governments.
Oyedele said some commentaries wrongly relied on outdated data while ignoring ongoing public financial management reforms highlighted in the World Bank report.
He cited early 2026 reforms, including a new Executive Order on petroleum revenue remittances, which he said would strengthen transparency and increase distributable revenues by about 0.4% of GDP annually.
He added that the World Bank report shows improving macroeconomic conditions, including easing inflation, stronger external reserves, a current account surplus, and a decline in Nigeria’s debt-to-GDP ratio for the first time in over a decade.
“The broader message of the report is that reforms are working and must be sustained and deepened to translate macroeconomic gains into inclusive growth,” he said.
The ministry urged accurate and responsible reporting of fiscal data, warning that misinterpretations could undermine public confidence in ongoing reforms and Nigeria’s economic outlook.
