The Federal Government has dismissed reports alleging that about 2% of GDP, over ₦8 trillion, was spent outside the approved budget, insisting that no “shadow budget” exists and that all public expenditure follows constitutional provisions.
In a statement issued Sunday by the Honourable Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, the government said recent commentary referencing the IMF Representative in Nigeria and the Fund’s 2026 Article IV Consultation Report was incorrect and risked misleading the public on financial management.
“For the avoidance of doubt, the Federal Government does not operate a ‘shadow budget’ or expend public funds outside the constitutional and statutory framework,” the statement said.
The Ministry explained that under Sections 80–83 and 162 of the 1999 Constitution, public funds can only be withdrawn with National Assembly approval. Expenditure is incurred through duly enacted Appropriation Acts, Supplementary Appropriation Acts, statutory authorities, and approved capital rollovers for multi-year projects.
It added that several statutory transfers and first-line charges established by law were being misrepresented. These include statutory allocations to development commissions, cost of collection retained by revenue agencies, capital expenditure for some agencies and the FCT, special interventions for security and infrastructure, and debt service obligations.
“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,” the Ministry stated.
The government clarified that classification differences under international fiscal reporting standards should not be interpreted as unlawful spending. It also noted that the IMF’s observation focused on “comprehensiveness, timing and presentation of fiscal reporting” rather than the legality of expenditure.
The statement further debunked claims that the alleged amount increased the budget deficit, explaining that a deficit is determined by the relationship between total revenue and total expenditure, not by the financing channel used.
Citing ongoing reforms, the Ministry said President Bola Ahmed Tinubu had requested the National Assembly to harmonise multiple budgets into a single framework during the presentation of the 2026 Appropriation Bill on December 19, 2025.
“Recent reforms have significantly strengthened public financial management with ongoing improvements in budget assumptions and credibility, transparent revenue administration, digitalisation of government financial processes, and stronger treasury management,” the Ministry added, noting that these have been acknowledged by the IMF and credit rating agencies.
The government urged that public debate be based on facts, saying “mischaracterising technical observations as evidence of unlawful expenditure neither advances informed public discourse nor strengthens democratic accountability.”
It reaffirmed commitment to transparency, rule of law, and working with the National Assembly and oversight institutions to strengthen fiscal governance in line with international best practices.
