No leakage in federation revenue — FG
The Federal Government says deductions from the federation earnings by the Federation Account Allocation Committee, FAAC, are being misrepresented as a diversion of revenue.
In a statement on Sunday signed by Taiwo Oyedele, minister of state for finance, the ministry said some media reports are misrepresenting the findings of the World Bank in the Nigeria Development Update, NDU.
The ministry said reports on the NDU are describing the deduction reported by the World Bank as a diversion of revenue or presenting it as hidden spending, whereas the financial institution attributed it to statutory transfers, savings and investments, security-related expenditures, among others.
“The attention of the Federal Ministry of Finance has been drawn to recent media reports and commentaries that misrepresent the findings of the latest Nigeria Development Update by the World Bank, particularly claims suggesting that a significant portion of federation earnings is being “diverted” or constitutes “hidden spending,”” the ministry said.
“These interpretations misrepresent the World Bank’s analysis and reflect a misunderstanding of the fiscal system.
“The misreporting in question incorrectly characterises Federation Account Allocation Committee, FAAC, deductions as “waste” or missing funds. This is incorrect.
“FAAC deductions, as presented in the World Bank report, include: Statutory transfers, Savings and investments, Security-related expenditures, Cost-of-collection charges, Refunds to Ministries, Departments and Agencies, MDAs, transfers and interventions benefiting subnational governments.”
The finance ministry said refunds and transfers to states and other tiers of government are not leakages.
“They represent legitimate fiscal flows, including repayments of obligations and statutorily backed allocations,” the government said.
World Bank noted reforms will improve transparency
The ministry also questioned commentaries around the World Bank report, asking why the Bretton Woods institution’s positive review of the federal government’s reforms was ignored.
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