Fiscal System: Nigerian Government decries ‘misinterpretation’ of World Bank’s Development Update

*Taiwo Oyedele, Minister of State for Finance explains how the World Bank’s Nigeria Development Update emphasises the West African country’s ‘reforms are working, and they must be sustained and deepened to translate macroeconomic gains into inclusive growth’

Isola Moses | ConsumerConnect

The Nigerian Government through the Federal Ministry of Finance has said recent media reports and commentaries actually misrepresented the findings of the latest Nigeria Development Update by the World Bank.

The government particularly said the claims suggesting that a significant portion of Federation earnings is being “diverted” or constitutes “hidden spending” is a misinterpretation of the Bank’s analysis.

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Mr. Taiwo Oyedele, Honourable Minister of State for Finance, who noted this in a statement Sunday, April 19, 2026, said “these interpretations misrepresent the World Bank’s analysis and reflect a misunderstanding of the fiscal system.”

As regards what he described as the misrepresentation of Federation Account Allocation Committee deductions, Oyedele stated that misreporting in question incorrectly characterises FAAC deductions as “waste” or missing funds.

He asserted “this is incorrect.”

The Minister also explained that FAAC deductions, as presented 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.

Oyedele noted it is important to emphasise that refunds and transfers to states and other tiers of government are not leakages.

He stated: “They represent legitimate fiscal flows, including repayments of obligations and statutorily backed allocations.”

In what the government also described as selective use of outdated data for misinterpretation of the World Bank analysis, the Minister insisted that some commentaries selectively relied on past data while ignoring the forward-looking analysis, and ongoing public financial management reforms highlighted in the report.

The government explained 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.”

Oyedele said misinterpreting one aspect of the analysis without acknowledging the progressive reforms and measures already introduced to enhance distributable Federation revenues gives “a distorted picture”.

Highlighting the country’s stronger macroeconomic fundamentals, the Federal Government affirmed the the broader message of the World Bank report is positive and forward-looking:

“Economic growth is becoming more broad-based across sectors.

“Inflation, while still elevated, is declining due to deliberate policy actions.”

The statement also noted: “Nigeria’s external position has strengthened significantly, with improved reserves and a current account surplus.

“Debt indicators have improved, including a decline in the debt-to-GDP ratio, the first in over a decade.”

The Minister said these developments reflect the outcomes of the current administration’s ongoing macroeconomic policies and public financial management reforms.

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Explaining the real message of the World Bank’s Nigeria Development Update, Oyedele further stressed 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.”

The Minister restated the Federal Government’s commitment to strengthening fiscal transparency, improving revenue mobilisation, ensuring efficient public spending, and deepening reforms to support inclusive economic growth in Nigeria.

He further stated: “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 organisations, and the public to engage constructively with fiscal information, and avoid twisted interpretations that may undermine reform efforts and fuel public discord.”

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