The Federal Ministry of Finance has rejected claims that Nigeria's federation revenue is being diverted, calling reports of hidden spending a misreading of the World Bank's Nigeria Development Update. The World Bank had stated that fuel prices in Nigeria rose by more than 50 percent following the Iran conflict, increasing inflation and hurting household welfare. Fiseha Haile, the World Bank's Lead Economist for Nigeria, said the price surge has driven up transportation, food, and production costs during a presentation in Abuja. The ministry clarified that deductions by the Federation Account Allocation Committee (FAAC) are not lost funds but include statutory transfers, savings, security spending, cost-of-collection charges, refunds to MDAs, and transfers to subnational governments. Minister of State for Finance Taiwo Oyedele said these fiscal flows are legitimate and not leakages, countering media reports of fund diversion. The ministry pointed to reforms in early 2026, including an executive order to secure petroleum revenue remittances, which the World Bank said could boost distributable revenues by 0.4% of GDP annually. It also cited improved debt indicators, including the first drop in debt-to-GDP ratio in over ten years, and noted the World Bank's observation of broader economic growth, falling inflation, higher reserves, and a current account surplus. The ministry urged responsible reporting, warning that misrepresentation could weaken public confidence in ongoing reforms.
The Finance Ministry's insistence that FAAC deductions are not leakages clashes with public skepticism over how funds are tracked after disbursement to states and MDAs. Nigerians named in the report's fiscal flows—particularly those receiving refunds and subnational transfers—have no public audit trail confirming how such funds are used. The World Bank's 0.4% GDP gain from new revenue reforms means little if actual spending at state and agency levels remains opaque. Without verifiable disclosures, the claim of improved transparency rings hollow for citizens bearing the cost of 50% fuel price hikes.
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