Nigeria's Finance Ministry Slams Budget Spending Allegations

The Federal Ministry of Finance has rejected reports and public commentary alleging that about two per cent of Nigeria’s GDP, said to amount to more than ₦8 trillion, was spent outside the approved budget.

In a press release dated 5 July 2026, the ministry said the claims were based on references to the IMF Representative in Nigeria and the Fund’s 2026 Article IV Consultation Report, but insisted that the allegations were false and capable of misleading the public on how government finances are managed.

According to the ministry, the Federal Government does not operate any “shadow budget” and cannot lawfully spend public funds outside the constitutional and statutory framework.

It said public expenditure is governed by Sections 80 to 83 and 162 of the 1999 Constitution, as amended, which require that money be withdrawn and spent only in line with the Constitution and laws passed by the National Assembly.

The ministry explained that federal spending is carried out through duly enacted Appropriation Acts, Supplementary Appropriation Acts and other statutory authorities approved by lawmakers. It added that multi year capital projects, which often span more than one budget cycle, are implemented under existing laws and approved rollover provisions where applicable.

“These are recognised features of public financial management and should not be misconstrued as expenditures outside the budget,” the statement said.

The ministry also challenged the basis of the allegations, saying anyone making such claims should identify the specific projects alleged to have been carried out without appropriation or legal authority and provide credible evidence.

“It is inaccurate to suggest that trillions of naira have been secretly spent outside legislative approval,” the statement said, adding that assertions of such magnitude must rest on “verifiable facts rather than conjecture”.

The clarification comes amid renewed scrutiny of Nigeria’s fiscal reporting and public expenditure processes, especially at a time when the country is seeking to strengthen transparency, improve budget credibility and align domestic reporting with international statistical standards.

The ministry used the opportunity to distinguish between appropriation, expenditure authorisation, financing and fiscal reporting. It said misunderstanding these distinctions could lead to false conclusions about how government funds are deployed.

According to the statement, Nigeria’s public finance framework includes several statutory transfers, first line charges and intervention mechanisms created by Acts of the National Assembly. These include statutory allocations and contributions to development commissions and other agencies established by law, cost of collection and cost of administration retained by revenue collecting agencies, capital expenditure approved in separate budgets for some agencies and the Federal Capital Territory, special interventions for security and infrastructure, and debt service obligations authorised by law.

“These expenditures are neither secret nor illegal,” the ministry said. “They are established by law, disclosed in various fiscal reports, and subject to applicable oversight, audit and accountability mechanisms.”

It added that differences in how some expenditures are presented in fiscal reporting should not be confused with illegality. The ministry said treatment for reporting purposes may differ from annual Appropriation Act presentation, especially under international statistical and reporting standards adopted by the Federal Government.

The statement also rejected the suggestion that the reported sum should automatically be treated as an increase in the budget deficit. It said a fiscal deficit is determined by the relationship between total government revenue and total government expenditure, not simply by the source or classification of a project’s financing.

“Whether a capital project is financed through annual appropriations, supplementary appropriations, statutory transfers, approved intervention mechanisms, or other lawful financing arrangements does not, by itself, increase the fiscal deficit,” the ministry said.

The Federal Government said the IMF’s observation relates mainly to the comprehensiveness, timing and presentation of fiscal reporting rather than the legality of expenditure. It said Nigeria is continuing reforms to improve alignment between budget presentation and international fiscal reporting standards.

The ministry pointed to the President Bola Ahmed Tinubu administration’s reform agenda, saying President Tinubu had formally requested the National Assembly to end the practice of running multiple and overlapping budgets and instead harmonise them into a single framework during his presentation of the 2026 Appropriation Bill on 19 December 2025.

The statement said the government remains committed to prudent fiscal management, transparency and accountability. It listed recent reforms as including stronger budget assumptions, improved revenue administration, digitalisation of government financial processes and tighter treasury management.

According to the ministry, these measures have already received acknowledgement from the IMF, other multilateral institutions, credit rating agencies, international media organisations and investors.

While defending the government’s position, the ministry also acknowledged the importance of public scrutiny. It said debate over public spending is healthy in a democracy, but argued that such debate must be grounded in facts and a proper understanding of Nigeria’s constitutional and fiscal architecture.

“Public debate is both welcome and essential in a democratic society,” the statement said. “However, it should be based on facts and an accurate understanding of Nigeria’s constitutional and fiscal framework.”

It warned that turning technical observations into allegations of illegality could distort public discourse and weaken democratic accountability rather than strengthen it.

“The Federal Government will continue to uphold the rule of law, maintain transparency in the management of public resources, and work with the National Assembly, oversight institutions, development partners and the Nigerian people to further strengthen fiscal governance in line with international best practices,” the ministry added.

The statement was signed by Taiwo Oyedele, who was identified as Minister of Finance and Coordinating Minister of the Economy.

The ministry’s response is likely to add fresh debate to the wider discussion over Nigeria’s budget transparency, fiscal reporting standards and the public’s trust in how government spending is tracked and explained.

It also places renewed attention on the gap, if any, between budget presentation and the way public expenditure is classified in official and international reports.