No Revenue Leakage, FG Insists as It Faults Interpretation of World Bank Report

The Federal Government has insisted that there is no leakage in federation revenue, pushing back against claims that FAAC deductions amount to diversion of funds.

The clarification followed media interpretations of the World Bank’s Nigeria Development Update (NDU), which the Ministry of Finance said were misleading.

In a statement signed by Minister of State for Finance, Taiwo Oyedele, the ministry said deductions highlighted in the report were legitimate fiscal transactions, not hidden spending.

“The attention of the Federal Ministry of Finance has been drawn to recent media reports… suggesting that a significant portion of federation earnings is being ‘diverted’… These interpretations misrepresent the World Bank’s analysis and reflect a misunderstanding of the fiscal system,” the statement read.

According to the ministry, the deductions cited by the World Bank include statutory transfers, savings, security expenditures, cost-of-collection charges, and refunds to MDAs, as well as allocations benefiting states and local governments.

It stressed that such transactions are lawful and should not be misconstrued as waste or missing funds.

“They represent legitimate fiscal flows, including repayments of obligations and statutorily backed allocations,” the government said.

The ministry also questioned why positive aspects of the World Bank’s report were overlooked, noting that the institution acknowledged reforms that would enhance transparency and boost revenue.

It pointed to measures introduced in early 2026, including an Executive Order on petroleum revenue remittances, which are projected to increase government revenue by about 0.4 percent of GDP annually.

“Some commentaries selectively relied on past data while ignoring the forward-looking analysis… highlighted in the report,” the ministry said.

Beyond fiscal reforms, the government said the report highlighted improvements in Nigeria’s economy, including broader-based growth, easing inflation, stronger external reserves, and improved debt indicators.

“The conclusion of the World Bank is not that Nigeria’s fiscal system is collapsing… Rather, it states that reforms are working,” the ministry noted.

Reaffirming its stance, the Federal Government pledged to deepen reforms, improve transparency, and strengthen public finance management.

“An accurate understanding and responsible reporting of fiscal information are critical… to maintaining confidence in Nigeria’s reform trajectory,” the statement added.

The World Bank had earlier removed the Nigeria Development Update from its website on April 10, just days after publication.

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