Federal government has dismissed claims that deductions from federation earnings through the Federation Account Allocation Committee (FAAC) represent revenue diversion, insisting that there is no leakage in Nigeria’s federation account system.
Gatekeepers News reports that in a statement issued on Sunday by Taiwo Oyedele, the Ministry of Finance said recent media interpretations of the World Bank’s Nigeria Development Update (NDU) were misleading and misrepresented the report’s findings.
The ministry explained that what some reports describe as diversion or hidden spending are actually statutory and legitimate fiscal processes. These include legally approved transfers, savings and investments, security-related spending, cost-of-collection charges, refunds to ministries, departments and agencies, as well as payments and interventions involving subnational governments.
It stressed that refunds and intergovernmental transfers should not be viewed as leakages, but as lawful financial obligations within the federation structure.
The government also questioned the focus of some commentaries on alleged negative aspects of the World Bank report, saying they ignored the institution’s broader assessment of ongoing reforms.
According to the ministry, the World Bank acknowledged that recent policy changes introduced in 2026, including an executive order on petroleum revenue remittances, are expected to improve transparency and boost revenues for all tiers of government.
It added that the report also highlighted improvements in Nigeria’s economic outlook, including stronger external reserves, a current account surplus, and a reduction in the debt-to-GDP ratio for the first time in over a decade. Inflation was also noted to be easing, although still high.
The ministry said the World Bank’s conclusion was not that Nigeria’s fiscal system is failing, but that ongoing reforms are producing results and must be sustained to ensure inclusive growth.
It further stated that responsible reporting of fiscal data is important to maintain public confidence in government reforms and urged media organisations and stakeholders to avoid distorted interpretations.
The statement also noted that the World Bank later removed the Nigeria Development Update report from its website days after publication, though no reason was provided.
