The controversy erupted after the IMF disclosed that Nigeria left public spending equivalent to about two per cent of GDP unreported in recent official budgets.
kaNo —
The Federal Government has dismissed claims that it spent more than ₦8 trillion outside the 2026 budget.
The Federal Government has described the allegation as a misrepresentation of the International Monetary Fund’s 2026 Article IV Consultation Report and insisting that all public expenditures were undertaken within the country’s constitutional and legal framework.
The government’s response followed reports suggesting that Nigeria failed to disclose public spending equivalent to about two per cent of its Gross Domestic Product in recent official budgets, a development that allegedly understated the country’s fiscal deficit and financing needs.
The rebuttal was contained in a statement issued on Sunday by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, who maintained that the Federal Government does not operate a “shadow budget” or expend public funds outside legislative approval.
“The Federal Government has noted recent public commentary alleging that approximately two per cent of GDP amounting to over ₦8 trillion was spent outside the approved budget based on references to the IMF Representative in Nigeria and the Fund’s 2026 Article IV Consultation Report,” Oyedele said.
“These claims are incorrect and risk misleading the public regarding the government’s financial management.”
Speaking in Lagos, the IMF Resident Representative in Nigeria, Christian Ebeke, explained that the concern related to expenditures that were not fully reflected in official fiscal reports.
“So far we think that there are about two per cent of GDP of expenditure that were not reported that should be reported and should be recorded, so that this statistical discrepancy will disappear,” Ebeke said.
Former Vice President Atiku Abubakar and the presidential candidate of the National Democratic Party, Peter Obi, called for an investigation into the alleged off-budget expenditure, arguing that the reported discrepancy raised serious questions about transparency and accountability in the management of public finances.
Responding to the criticism, Oyedele said the claims had misconstrued the IMF’s technical observations and created the false impression that government funds were secretly spent without legislative approval.
According to the minister, all Federal Government expenditures are carried out through duly enacted Appropriation Acts, Supplementary Appropriation Acts, and other statutory authorities approved by the legislature.
He explained that multi-year capital projects implemented across different budget cycles, as well as approved capital rollovers, were standard components of public financial management and should not be interpreted as off-budget spending.
“It is inaccurate to suggest that trillions of naira have been secretly spent outside legislative approval,” Oyedele stated.
“Such allegations should have identified the specific projects purportedly executed without appropriation or legal authority and present credible evidence in support of the claim.”
The minister further clarified that Nigeria’s public finance system includes several categories of expenditure that are authorised by existing laws even when they do not appear in the annual appropriation in the manner some observers expect.
He listed statutory allocations to development commissions, revenue collection costs retained by designated agencies, separately approved capital budgets for certain agencies and the Federal Capital Territory, security and infrastructure interventions, disaster response programmes, and debt servicing obligations as examples of expenditures backed by law.
According to him, such expenditures are neither hidden nor unlawful.
“These expenditures are neither secret nor illegal. They are established by law, disclosed in various fiscal reports, and subject to applicable oversight, audit and accountability mechanisms,” Oyedele said.
He explained that a fiscal deficit is determined by the difference between government revenue and total expenditure, rather than by the source or mechanism through which expenditure is financed.
“A fiscal deficit is determined by the relationship between total government revenues and total government expenditures. 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,” he said.
Oyedele argued that the IMF’s recommendations were aimed at improving the comprehensiveness and presentation of Nigeria’s fiscal reporting rather than questioning the legality of government spending.
According to him, the Fund’s observations focused on strengthening fiscal transparency by ensuring that all authorised expenditures are presented in a more comprehensive and harmonised manner.
He recalled that the President urged lawmakers to discontinue the practice of operating multiple and overlapping budgets and instead adopt a single, harmonised budget framework capable of improving fiscal transparency and accountability.
Oyedele maintained that the administration remained committed to prudent fiscal management and had introduced reforms aimed at strengthening public financial administration.
He said recent initiatives had enhanced budget credibility, improved revenue administration, strengthened treasury management, and accelerated the digitalisation of government financial processes.
“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,” he added.
He urged Nigerians to rely on accurate facts when discussing fiscal issues, warning that misrepresenting technical observations contained in international reports could distort public understanding and undermine informed debate on economic policy.
Nigeria Can Achieve Economic Development Through Tax System-Oyedele
Meanwhile, Oyedele expressed optimism that Nigeria could achieve significant economic transformation through a more efficient tax administration system.
Speaking on Saturday while receiving a delegation from the Chartered Institute of Taxation of Nigeria in Abuja, the minister said the country would witness monumental development if it succeeded in getting its tax system right.
He commended the institute for introducing a National Tax Awareness Day and for supporting the Federal Government’s ongoing tax reform programme.
Oyedele, however, noted that public perception remained a major challenge, saying many Nigerians still viewed taxation solely as a means through which government collected money from citizens.
He urged the institute to intensify public enlightenment on the role of taxation in national development and the provision of public services.
According to the minister, the government’s objective is not to increase tax rates but to broaden the country’s tax base by bringing more eligible individuals and businesses into the tax net.
He acknowledged that Nigeria’s tax revenue remains below the level required to adequately finance development priorities, stressing that improving tax compliance rather than raising tax burdens would provide the resources needed to drive sustainable economic growth and infrastructure development.