The Federal Government (FG) has denied allegations that it operated a “shadow budget” or spent public funds outside legally approved frameworks, describing recent commentary on the matter as inaccurate and misleading.
The clarification followed claims that the government spent about two per cent of Nigeria’s Gross Domestic Product, estimated at more than ₦8 trillion, outside the approved budget.
The allegations cited references to the International Monetary Fund’s representative in Nigeria and the Fund’s 2026 Article IV Consultation Report.
In a statement signed by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, the government said all public expenditure complied with constitutional and statutory provisions approved by the National Assembly.
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Oyedele said Sections 80 to 83 and Section 162 of the 1999 Constitution, as amended, required the government to withdraw and spend public funds only in accordance with laws passed by the National Assembly.
He explained that duly enacted Appropriation Acts guided federal expenditure, Supplementary Appropriation Acts and other statutory approvals.
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He added that multi-year capital projects, which often spanned several budget cycles, relied on approved capital rollovers and did not constitute extra-budgetary spending.
“It is inaccurate to suggest that trillions of naira have been secretly spent outside legislative approval,” Oyedele said.
He added that such claims should be supported by verifiable evidence and specific project details rather than speculation.
The minister also explained that several lawful spending mechanisms established by the National Assembly accounted for expenditures that might not appear in the annual Appropriation Act in the same format.
He said these included statutory allocations and contributions to development commissions and agencies, cost-of-collection and administrative deductions retained by revenue agencies, capital expenditure approved under separate budgets for specific agencies and the Federal Capital Territory.
Also included is aspecial interventions authorised for security, infrastructure and disaster response.
Other items included debt-service obligations and statutory transfers approved under existing laws.
Oyedele said the reporting format for some of the expenditures differed from the annual Appropriation Act because Nigeria adopted international fiscal reporting standards.
However, he maintained that the funds remained lawful, transparent and subject to audit and legislative oversight.
The FG also rejected claims that the ₦8 trillion figure represented an increase in the country’s budget deficit.
The fiscal deficit is determined by the difference between total government revenue and total expenditure, irrespective of whether projects are financed through annual appropriations, supplementary budgets or statutory transfers.
The ministry said the IMF’s observations focused on the timing, completeness and presentation of fiscal data, rather than the legality of government spending.
The government added that it had continued efforts to harmonise budget presentation with international standards.
It noted that President Bola Tinubu had requested the National Assembly to end the practice of running overlapping budgets and adopt a single, unified fiscal framework during his presentation of the 2026 Appropriation Bill on December 19, 2025.
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The FG said it remained committed to transparency, accountability and the rule of law.
It added that its ongoing public financial management reforms, including the digitalisation of financial processes, improvement of budget credibility and strengthening of treasury management, had received recognition from the International Monetary Fund, international rating agencies and global investors.
While welcoming public debate as an essential part of democracy, the government urged commentators to base discussions on a proper understanding of Nigeria’s fiscal structure.
It said presenting technical fiscal reporting issues as unlawful spending did not serve the public interest.
