Finance Ministry rejects N8tn ‘shadow spending’ claims, says IMF report misinterpreted

THE Federal Ministry of Finance has refuted allegations that the Nigerian government spent more than N8 trillion outside the approved budget, saying the claims stem from a misreading of the International Monetary Fund’s (IMF) 2026 Article IV Consultation Report.

In a statement released on Saturday, the ministry described reports suggesting that about 2 percent of Nigeria’s Gross Domestic Product (GDP) was spent outside the official budget as inaccurate and capable of misleading the public about the country’s fiscal management.

‘The Federal Government has noted recent public commentary alleging that approximately two percent 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. These claims are incorrect and risk misleading the public regarding the government’s financial management,” the statement said.

The ministry stressed that the Federal Government does not maintain any unofficial or hidden spending arrangement outside the legal framework governing public finance.

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“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,” it stated.

According to the ministry, every government expenditure is executed under the provisions of the Constitution, Appropriation Acts, Supplementary Appropriation Acts and other statutory approvals granted by the National Assembly.

It further explained that major capital projects often extend across several budget cycles and may involve approved capital rollovers, noting that such practices are standard public finance procedures and should not be mistaken for expenditure outside legislative approval.

“It is inaccurate to suggest that trillions of naira have been secretly spent outside legislative approval,” the ministry said.

The government challenged those making the allegations to identify any project executed without appropriation or legal authority and present verifiable evidence to support their claims.

“To be meaningful, assertions of this magnitude must be supported by verifiable facts rather than conjecture,” the statement added.

The ministry also noted that Nigeria’s fiscal framework legally provides for statutory transfers, first-line charges, intervention mechanisms, debt service obligations and other expenditure programmes created under existing laws.

It maintained that these expenditures are lawful, publicly disclosed and subject to established oversight, audit and accountability processes.

“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 differences in the way such expenditures are reflected in fiscal reports and annual budgets should not be interpreted as proof of unlawful spending.

It also dismissed suggestions that the reported N8 trillion represented an expansion of Nigeria’s fiscal deficit, explaining that fiscal deficits are determined by the relationship between government revenue and expenditure, not by the financing mechanisms adopted for projects.

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According to the ministry, the IMF’s observations were focused on “the comprehensiveness, timing and presentation of fiscal reporting rather than the legality of expenditure.”

It added that President Bola Tinubu had already directed the harmonisation of multiple and overlapping budgets into a unified framework during the presentation of the 2026 Appropriation Bill to the National Assembly in December 2025.

The ministry said ongoing reforms in revenue administration, treasury management and the digitalisation of public financial processes have continued to improve transparency and accountability across government finances.

While acknowledging the importance of public debate in a democracy, the ministry urged stakeholders to ensure discussions on fiscal issues are based on facts and a proper understanding of Nigeria’s constitutional and financial framework.

“Mischaracterising technical observations as evidence of unlawful expenditure neither advances informed public discourse nor strengthens democratic accountability.”