By Daniel Oluwatobiloba Popoola
The Federal Government has denied claims that it spent more than ₦8 trillion, estimated at about two per cent of Nigeria’s Gross Domestic Product (GDP), outside the approved budget, insisting that the allegation is false and a misrepresentation of the International Monetary Fund (IMF)’s 2026 Article IV Consultation Report.
The position was contained in a statement issued on Sunday, 5 July 2026 by the Federal Ministry of Finance and signed by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele.
The statement was a response to recent public commentary which cited remarks attributed to the IMF Representative in Nigeria and the Fund’s 2026 Article IV Consultation Report to allege that the government operated a “shadow budget.”
The ministry described the claims as misleading, stressing that the Federal Government does not spend public funds outside the constitutional and statutory framework governing public finance.
“For the avoidance of doubt, the Federal Government does not operate a ‘shadow budget’ or expend public funds outside the constitutional and statutory framework established for public finance,” Oyedele said.
According to the minister, Sections 80 to 83 and 162 of the 1999 Constitution, as amended, permit the withdrawal and expenditure of public funds only in line with the Constitution and laws enacted by the National Assembly.
He explained that Federal Government spending is carried out through duly enacted Appropriation Acts, Supplementary Appropriation Acts and other statutory approvals granted by the National Assembly.
Oyedele added that multi-year capital projects, which span more than one budget cycle, are implemented under extant laws with approved capital rollovers where applicable, noting that such projects are recognised features of public financial management and should not be mistaken for off-budget expenditure.
He also faulted claims that trillions of naira were secretly spent without legislative approval.
“It is inaccurate to suggest that trillions of naira have been secretly spent outside legislative approval. Such allegations should have identified the specific projects purportedly executed without appropriation or legal authority and present credible evidence in support of the claim,” he said.
The minister explained that the controversy stemmed from a misunderstanding of the distinction between budget appropriation, expenditure authorisation, financing and fiscal reporting.
He noted that Nigeria’s public finance framework provides for several statutory transfers, first-line charges and intervention mechanisms created by Acts of the National Assembly.
These include statutory allocations to development commissions and agencies established by law, cost of collection and administration retained by designated revenue-generating agencies, capital expenditure approved under separate budgets for some agencies and the Federal Capital Territory, special interventions for security, infrastructure, disaster response and other national priorities, as well as debt servicing obligations and other statutory transfers.
“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 statement said.
The ministry explained that while the treatment of such expenditures under international statistical and fiscal reporting standards may differ from their presentation in the annual Appropriation Act, the classification should not be interpreted as evidence of unlawful spending.
It also dismissed suggestions that the reported amount represented an increase in Nigeria’s fiscal deficit.
According to the statement, a fiscal deficit is determined by the relationship between total government revenue and total expenditure, not by whether projects are financed through annual appropriations, supplementary budgets, statutory transfers or other lawful intervention mechanisms.
Oyedele said the IMF’s observations were directed at improving the comprehensiveness, timing and presentation of Nigeria’s fiscal reporting rather than questioning the legality of government expenditure.
“Indeed, the IMF’s observation relates primarily to the comprehensiveness, timing and presentation of fiscal reporting rather than the legality of expenditure,” he stated.
The minister noted that Nigeria is strengthening the alignment between budget presentation and international fiscal reporting standards as part of ongoing public financial management reforms.
He recalled that President Bola Ahmed Tinubu, while presenting the 2026 Appropriation Bill to a joint session of the National Assembly on December 19, 2025, urged lawmakers to discontinue the practice of operating multiple and overlapping budgets in favour of a single, harmonised budget framework.
The Federal Government also reaffirmed its commitment to prudent fiscal management, transparency and accountability, saying reforms had improved budget credibility, strengthened revenue administration, enhanced treasury management and accelerated the digitalisation of government financial processes.
According to the statement, the reforms have been acknowledged by the IMF, other multilateral institutions, international credit rating agencies, major media organisations and investors.
While welcoming public scrutiny, the government urged commentators to base public discourse on facts and a proper understanding of Nigeria’s constitutional and fiscal framework.
“Public debate is both welcome and essential in a democratic society.
However, it should be based on facts and an accurate understanding of Nigeria’s constitutional and fiscal framework. Mischaracterising technical observations as evidence of unlawful expenditure neither advances informed public discourse nor strengthens democratic accountability,” the statement added.
The government reiterated its commitment to upholding the rule of law, ensuring transparency in the management of public resources and working with the National Assembly, oversight institutions, development partners and Nigerians to strengthen fiscal governance in line with international best practices.
