FG Faults Misreporting of World Bank Report on FAAC

FG Faults Misreporting of World Bank Report on FAAC
Says FAAC Deductions Not Missing Funds or Waste
Noted that Nigeria’s economic outlook is showing signs of improvement

The Federal Government has dismissed claims that deductions from federation earnings by the Federation Account Allocation Committee (FAAC) amount to revenue diversion.

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Eko Hot Blog reports that in a statement on Sunday, the Minister of State for Finance, Taiwo Oyedele, said recent media reports have misinterpreted findings from the World Bank’s Nigeria Development Update.

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According to the ministry, the deductions highlighted in the report are not hidden spending or missing funds, but legitimate financial allocations. These include statutory transfers, savings and investments, security-related expenses, cost-of-collection charges, and refunds to Ministries, Departments and Agencies (MDAs), as well as support for state governments.

Oyedele stressed that describing such deductions as “waste” or “diversion” reflects a misunderstanding of how Nigeria’s fiscal system works.

He explained that transfers and refunds to states and other tiers of government are lawful and backed by existing financial structures, noting that they should not be seen as leakages.

The ministry also raised concerns that some commentaries ignored the positive aspects of the World Bank report, particularly its assessment of ongoing economic reforms.

According to the government, the report acknowledged that recent reforms especially those introduced in early 2026 are already improving transparency and are expected to increase revenue available to all levels of government.

The ministry added that the World Bank projected that these reforms could boost revenue by about 0.4 percent of Gross Domestic Product annually.

FG Faults Misreporting of World Bank Report on FAAC

It further noted that Nigeria’s economic outlook is showing signs of improvement, with broader growth across sectors, declining inflation, stronger foreign reserves, and a current account surplus.

The government also pointed to improvements in debt indicators, including a reduction in the debt-to-GDP ratio for the first time in over a decade.

The ministry emphasised that the World Bank’s overall conclusion was not that Nigeria’s fiscal system is failing, but that reforms are working and need to be sustained.

Reaffirming its commitment, the Federal Government said it would continue to strengthen transparency, improve revenue generation, and ensure responsible public spending.

It also urged the media and the public to interpret fiscal reports carefully to avoid misleading narratives that could undermine confidence in the economy.