\n\nThe Federal Government has dismissed claims suggesting that Nigeria operates a system of “hidden spending” or diversion of public funds, stating that such interpretations of a recent World Bank report are inaccurate and misleading. The clarification was issued by the Federal Ministry of Finance, which said the controversy stems from a misunderstanding of Nigeria’s fiscal structure—particularly how funds are handled within the Federation Account. 
According to the government, the figures referenced in the World Bank’s Nigeria Development Update—especially those relating to deductions from federation revenue—have been wrongly portrayed as secret or missing funds. It explained that these deductions are legitimate and transparent fiscal processes, including statutory transfers, refunds, and cost-of-collection charges that occur before revenue is shared among federal, state, and local governments. 
The Ministry stressed that such deductions do not amount to diversion or hidden spending, but are part of Nigeria’s established financial framework governed by law. It added that portraying them otherwise reflects a misunderstanding of how public finance operates in the country, noting that all transactions are properly documented within official systems. 
The government also pointed out that the broader message of the World Bank report is largely positive, highlighting improvements in economic reforms, revenue generation, and fiscal management. It urged analysts and commentators to consider the full context of the report, including ongoing reforms aimed at improving transparency and increasing the amount of revenue available to all tiers of government. 
