FG says FAAC deductions are not revenue diversion but statutory payments, responding to misinterpretations of World Bank Nigeria Development Update report.

The Federal Government of Nigeria has strongly dismissed recent claims suggesting that deductions from federation earnings managed through the Federation Account Allocation Committee represent “revenue diversion,” “hidden spending,” or financial mismanagement.

The clarification follows widespread public debate triggered by interpretations of the World Bank’s latest Nigeria Development Update, which examined Nigeria’s fiscal structure, revenue flows, and public financial management reforms.

In a detailed statement issued by the Ministry of Finance, the government said the interpretations circulating in parts of the media are inaccurate, misleading, and reflect a misunderstanding of how Nigeria’s federation account system operates.

The ministry emphasized that FAAC deductions are not missing funds or unauthorized spending, but rather statutory and constitutionally backed financial obligations that support governance at federal, state, and local government levels.