The Honourable Minister of State for Finance, Taiwo Oyedele, has strongly condemned recent media reports misrepresenting the World Bank’s Nigeria Development Update, warning that twisted interpretations of fiscal data risk undermining public confidence in the nation’s reform trajectory.
The Minister’s rebuke follows what his office described as “false allegations” suggesting that a significant portion of federation earnings is being diverted or constitutes hidden spending.
These claims, which surfaced after the World Bank released its April 2026 report, alleged that 39 to 41 percent of federation revenues were being swallowed by pre-distribution deductions before reaching federal, state, and local governments.
But Oyedele insisted the narrative is both misleading and dangerous.
“These interpretations misrepresent the World Bank’s analysis and reflect a misunderstanding of the fiscal system,” the Minister stated in an official press release. He clarified that what critics call “missing funds” are, in fact, legitimate fiscal flows including statutory transfers, savings and investments, security-related expenditures, cost-of-collection charges, refunds to MDAs, and transfers benefiting subnational governments.
The Minister’s defence is backed by a major reform that critics conveniently ignored: Executive Order 9, signed by President Bola Tinubu in February 2026.
The Executive Order, which took effect on February 13, 2026, mandates the direct remittance of all oil and gas revenues—including taxes, royalties, and profits—to the Federation Account, effectively stripping the Nigerian National Petroleum Company Limited (NNPCL) of its long-standing power to deduct billions in fees before remitting funds.
Before this order, the NNPCL had been retaining three significant deductions that collectively diverted more than two-thirds of potential remittances: a 30 percent management fee on profit oil and gas from Production Sharing Contracts, another 30 percent for the Frontier Exploration Fund, and gas flare penalties directed to the Midstream and Downstream Gas Infrastructure Fund.
The Federal Government deemed these deductions “unjustified,” particularly given that the NNPCL already retains 20 percent of its profits for working capital and future investments.
Under the new framework, all three deductions are suspended. Contractors must now pay Royalty Oil, Tax Oil, and Profit Oil directly to the Federation Account.
What the World Bank Actually Said
The World Bank’s lead economist, Fiseha Gebregziabher, who presented the Nigeria Development Update in Abuja on April 7, 2026, did acknowledge that FAAC first-line deductions to federal MDAs more than doubled from about N1.9 trillion in 2023 to over N4.2 trillion in 2025.
However, the Bank explicitly noted that the reforms introduced in early 2026—including Executive Order 9—are already addressing these concerns. According to the World Bank, streamlining these deductions is expected to generate additional revenues of about 0.4 percent of GDP for the Federation annually.
The broader message of the World Bank report, which Oyedele emphasized, is positive and forward-looking: economic growth is becoming more broad-based, inflation is declining due to deliberate policy actions, Nigeria’s external position has strengthened with improved reserves and a current account surplus, and debt indicators have improved, including the first decline in the debt-to-GDP ratio in over a decade.
“The World Bank does not conclude that Nigeria’s fiscal system is collapsing or that reforms have failed,” Oyedele stressed. “Rather, it states that reforms are working, and they must be sustained and deepened.”
Implementation Underway
Minister of Finance and Coordinating Minister of the Economy, Wale Edun, who chairs the implementation committee for Executive Order 9, confirmed that the reforms are already being executed. The NNPCL has ceased collection of the 30 percent management fee and Frontier Exploration Fund deductions with immediate effect.
Edun also revealed that a technical subcommittee has been established to develop detailed guidelines for the transition to direct remittance and to commence a review of the Petroleum Industry Act to address structural anomalies that weaken Federation revenues.
The Nigeria Governors’ Forum has endorsed the direct remittance of oil and gas revenues into the Federation Account, describing the move as crucial to enhancing fiscal transparency, predictability, and constitutional alignment across all tiers of government.
A Call for Responsible Reporting
The Revenue Mobilisation Allocation and Fiscal Commission has similarly commended the Executive Order, describing it as “a bold, constitutionally grounded, and fiscally transformative intervention” aimed at restoring transparency and eliminating revenue leakages.
RMAFC Chairman M. B. Shehu noted that before this Executive Order, several structural provisions within the PIA created channels through which substantial Federation revenues were subject to multiple deductions that significantly reduced net remittances.
Oyedele urged stakeholders, media organizations, and the public to engage constructively with fiscal information and avoid twisted interpretations that may undermine reform efforts and fuel public discord. “An accurate understanding and responsible reporting of fiscal information are critical to maintaining confidence in Nigeria’s reform trajectory and economic outlook,” he said.
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