The Federal Government has firmly rejected allegations that it spent more than ₦8 trillion outside Nigeria’s approved fiscal framework, insisting that every expenditure made by the administration complies with constitutional provisions, existing financial regulations and approvals granted by the National Assembly.
The government described reports suggesting the existence of a “shadow budget” as inaccurate, misleading and capable of creating unnecessary doubts about the country’s fiscal management system.
The clarification followed observations contained in the International Monetary Fund’s (IMF) 2026 Article IV Consultation, which indicated that roughly two per cent of Nigeria’s Gross Domestic Product may have been spent through what it described as unreported off-budget capital expenditure. According to the IMF, such spending created noticeable differences between officially reported fiscal deficits and the actual financing requirements of the government.
Responding to the concerns, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said the interpretation of the IMF’s findings had been misunderstood and wrongly presented as evidence that the Federal Government secretly operated financial activities outside legally approved budgets.
The minister maintained that Nigeria’s financial management system is governed by the Constitution and several financial laws that clearly regulate how public money can be raised, allocated and spent. According to him, every withdrawal from public funds must be supported by constitutional provisions and legislative approvals, leaving no room for unauthorized government spending.
Oyedele stressed that Sections 80 to 83 as well as Section 162 of the 1999 Constitution, as amended, clearly establish the legal procedures for public expenditure. He explained that all federal spending is backed by duly enacted Appropriation Acts, Supplementary Appropriation Acts, statutory transfers and other financing mechanisms that have received legislative approval.
According to the minister, the Federal Government does not maintain hidden budgets or operate any financial arrangement outside the constitutional framework established for managing public resources. He noted that claims suggesting otherwise lack factual evidence and misrepresent the country’s public finance structure.
He argued that allegations involving trillions of naira being secretly spent without legislative approval should be supported with verifiable facts rather than assumptions or speculation. Oyedele challenged anyone making such claims to identify specific projects allegedly executed without appropriation or legal authorization.
The minister further explained that one of the areas creating confusion involves multi-year capital projects that naturally extend beyond a single fiscal year. He said Nigerian laws already provide mechanisms that allow capital projects to continue across different budget cycles through approved capital rollovers where necessary.
According to him, these arrangements are standard public finance practices used in many countries and should never be interpreted as evidence of hidden or off-budget expenditure. He added that long-term infrastructure projects often require funding across several years due to their scale and complexity.
Oyedele also emphasized the need to distinguish between budget appropriation, expenditure authorization, financing arrangements and fiscal reporting. He explained that these are different aspects of government financial management, even though they are often mistakenly treated as one concept in public discussions.
He noted that Nigeria’s fiscal system contains several expenditure categories that exist outside the annual Appropriation Act but remain fully authorized under existing legislation. These include statutory transfers to agencies established by law, debt service obligations, first-line charges and intervention programmes approved through Acts of the National Assembly.
The minister listed statutory allocations to development commissions and legally established agencies as examples of expenditures that are recognized under Nigerian law. He also referenced the cost of collection retained by designated revenue-generating agencies, explaining that these are expressly permitted by legislation and are fully accounted for in government financial records.
Other examples include capital expenditure approved separately for certain government agencies and the Federal Capital Territory, as well as special intervention programmes designed to address national priorities such as infrastructure development, national security, disaster response and emergency situations.
According to Oyedele, all these expenditures are publicly disclosed through fiscal reports and remain subject to multiple layers of oversight, auditing and accountability by relevant institutions. He stressed that differences in how these expenditures are presented under international fiscal reporting standards should not be mistaken for illegal spending.
The minister clarified that the IMF’s observations primarily relate to issues of fiscal reporting, presentation and comprehensiveness rather than allegations of unlawful expenditure. He explained that many countries continue to refine how government financial information is reported in order to align with evolving international standards.
He stated that Nigeria is equally implementing reforms aimed at improving the consistency between budget presentation and internationally accepted fiscal reporting practices. These reforms, he said, are part of broader efforts to strengthen public financial management and improve transparency.
Oyedele also dismissed suggestions that the amount mentioned by the IMF automatically translated into a larger fiscal deficit. He explained that fiscal deficits are calculated based on the difference between total government revenue and total expenditure, not on the financing methods used for approved projects.
According to him, legally authorized expenditures financed through various constitutional mechanisms cannot simply be classified as hidden deficits because they are presented differently under international reporting frameworks.
The minister further recalled that President Bola Ahmed Tinubu had already demonstrated commitment to improving fiscal transparency by requesting the National Assembly to harmonize Nigeria’s budgeting process. During the presentation of the 2026 Appropriation Bill in December 2025, the President urged lawmakers to eliminate the practice of running multiple overlapping budgets and instead adopt a single, integrated fiscal framework.
Oyedele said this request reflected the administration’s determination to simplify government budgeting, improve transparency and strengthen public confidence in the country’s financial management system.
He noted that the Federal Government has continued implementing several reforms aimed at improving fiscal discipline, revenue generation, treasury operations and digital management of public finances. According to him, these initiatives have significantly enhanced budget credibility while improving efficiency in government financial processes.
The minister added that Nigeria’s ongoing reforms have received positive recognition from the IMF, international credit rating agencies, development partners, investors and other global institutions that closely monitor public finance performance.
While acknowledging that public scrutiny remains an essential component of democratic governance, Oyedele urged stakeholders to ensure that discussions surrounding government finances are guided by facts, legal understanding and accurate interpretation of technical reports.
He warned that presenting technical observations as evidence of unlawful expenditure risks misleading the public and undermining informed national conversations on fiscal governance. According to him, constructive engagement should focus on strengthening transparency and accountability rather than promoting inaccurate conclusions.
The Federal Government reaffirmed its commitment to operating within the rule of law while ensuring prudent management of public resources. It also pledged to continue working closely with the National Assembly, oversight institutions, development partners and citizens to strengthen fiscal governance, improve reporting standards and maintain transparency in line with international best practices.
