FG Debunks ₦8 Trillion ‘Shadow Budget’ Claims, Says All Public Spending Backed by Law
By Pan Afric Reporters
The Federal Government has dismissed claims that it spent more than ₦8 trillion, representing about two per cent of Nigeria’s Gross Domestic Product (GDP), outside the approved budget, describing the allegations as false, misleading and a misrepresentation of observations contained in the International Monetary Fund (IMF)’s 2026 Article IV Consultation Report.
The clarification was contained in a press statement issued by the Federal Ministry of Finance and signed by the Honourable Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, in response to recent public commentary suggesting that the Federal Government operates a “shadow budget.”
The ministry categorically stated that the Federal Government does not spend public funds outside the constitutional and statutory framework governing public finance in Nigeria.
“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,” the statement said.
According to the ministry, Sections 80–83 and 162 of the Constitution provide that public funds can only be withdrawn and spent in accordance with the Constitution and laws enacted by the National Assembly.
It explained that all Federal Government expenditures are made pursuant to duly enacted Appropriation Acts, Supplementary Appropriation Acts and other statutory authorities approved by the National Assembly, adding that multi-year capital projects implemented across several budget cycles are recognised features of public financial management and should not be misconstrued as off-budget spending.
The government also faulted assertions that trillions of naira were secretly spent without legislative approval, insisting that such allegations should be backed with verifiable evidence.
“It is inaccurate to suggest that trillions of naira have been secretly spent outside legislative approval. Such allegations should identify the specific projects purportedly executed without appropriation or legal authority and present credible evidence in support of the claim,” the ministry stated.
The statement further clarified that Nigeria’s public finance system includes several statutory transfers, first-line charges and intervention mechanisms established by Acts of the National Assembly.
These include statutory allocations to development commissions and agencies, cost-of-collection deductions by revenue-generating agencies, approved capital expenditure for certain government institutions, security and emergency interventions, debt service obligations and other transfers authorised by law.
According to the ministry, such expenditures are lawful, publicly disclosed in fiscal reports and subject to oversight, auditing and accountability mechanisms.
“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 added.
The ministry also rejected suggestions that the reported amount translated into an increase in Nigeria’s fiscal deficit, explaining that a fiscal deficit is determined by the relationship between government revenue and total expenditure rather than the financing mechanism for approved projects.
It noted that the IMF’s observations were largely focused on improving the comprehensiveness, timing and presentation of Nigeria’s fiscal reporting in line with international standards, rather than questioning the legality of government spending.
The statement recalled that President Bola Ahmed Tinubu, while presenting the 2026 Appropriation Bill to a joint session of the National Assembly in December 2025, had requested lawmakers to discontinue the practice of operating multiple and overlapping budgets in favour of a harmonised budget framework.
The ministry maintained that the Federal Government remains committed to prudent fiscal management, transparency and accountability, noting that recent reforms have strengthened budget credibility, revenue administration, treasury management and the digitalisation of public financial processes.
It added that these reforms have received recognition from the International Monetary Fund, other multilateral institutions, international credit rating agencies and global investors.
Reaffirming its commitment to sound fiscal governance, the Federal Government urged Nigerians to ensure that public debates on economic matters are guided by facts and a proper understanding of the country’s constitutional and fiscal framework.
“The Federal Government will continue to uphold the rule of law, maintain transparency in the management of public resources, and work with the National Assembly, oversight institutions, development partners and the Nigerian people to further strengthen fiscal governance in line with international best practices,” the statement concluded.
