The Federal Government has dismissed claims that more than N8 trillion, estimated at two per cent of Nigeria’s Gross Domestic Product (GDP), was spent outside the approved budget, describing the allegation as a misrepresentation of findings contained in the International Monetary Fund’s (IMF) 2026 Article IV Consultation Report.
In a statement issued by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said reports suggesting the government operated a “shadow budget” were inaccurate and could mislead the public about the country’s fiscal management framework.
According to the ministry, all federal spending is carried out within the constitutional and legal framework governing public finance and is subject to legislative approval by the National Assembly.
“The Federal Government does not operate a shadow budget or expend public funds outside the constitutional and statutory framework established for public finance,” the statement said.
The ministry explained that government expenditures are executed through Appropriation Acts, Supplementary Appropriation Acts and other statutory authorisations approved by lawmakers.
It added that multi-year capital projects often span several budget cycles and may involve legally approved capital rollovers, which should not be interpreted as off-budget spending.
The clarification follows public commentary linking observations by the IMF to claims that trillions of naira had been spent without legislative approval.
According to the ministry, no evidence has been presented to support allegations of unlawful expenditure, noting that any claim of spending outside approved appropriations should identify specific projects and provide verifiable proof.
The government further stated that several categories of expenditure are legally established outside the annual appropriation process but remain authorised under existing laws.
These include statutory transfers to agencies and development commissions, revenue collection costs retained by designated agencies, debt service obligations, and intervention programmes addressing national priorities such as infrastructure, security and emergency response.
It stressed that such expenditures are disclosed in fiscal reports and subjected to oversight, auditing and accountability mechanisms.
The ministry also rejected suggestions that the reported amount represented an increase in Nigeria’s fiscal deficit.
“A fiscal deficit is determined by the relationship between total government revenues and total government expenditures,” it said, adding that the financing structure of a project does not automatically widen the deficit if the expenditure is already authorised under law.
The government argued that the IMF’s observations were primarily related to the comprehensiveness and presentation of fiscal reporting rather than the legality of spending.
It noted that Nigeria is currently implementing public finance reforms aimed at improving alignment between budget presentation and international reporting standards.
The ministry recalled that President Bola Ahmed Tinubu had, during the presentation of the 2026 Appropriation Bill in December 2025, urged the National Assembly to eliminate the practice of running overlapping budgets and adopt a more unified fiscal framework.
According to the statement, recent reforms have improved budget credibility, revenue administration, treasury management, and the digitalisation of government financial processes.
The government said these efforts have been recognised by the IMF, multilateral institutions, credit rating agencies and investors.
While welcoming public scrutiny of government finances, the ministry urged commentators to base discussions on verified facts and a proper understanding of Nigeria’s fiscal and constitutional framework.
“The Federal Government will continue to uphold the rule of law, maintain transparency in the management of public resources, and work with stakeholders to strengthen fiscal governance in line with international best practices,” the statement added.
