The Federal Government has dismissed claims that it operates a “shadow budget” or spent about ₦8.8 trillion outside the country’s fiscal plan, insisting that all public expenditure is undertaken within the constitutional and statutory framework governing public finance.
The government said assertions that approximately two per cent of Nigeria’s Gross Domestic Product (GDP) was expended outside approved budgets misrepresented the findings of the International Monetary Fund’s (IMF) 2026 Article IV Consultation and risked misleading the public.
In a statement issued on Sunday, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said every expenditure of the Federal Government is authorised through Appropriation Acts, Supplementary Appropriation Acts, statutory transfers and other lawful mechanisms approved 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,” Oyedele said.
He explained that under Sections 80 to 83 and 162 of the 1999 Constitution, public funds can only be withdrawn and spent in accordance with the Constitution and laws enacted by the National Assembly.
According to him, multi-year capital projects, statutory transfers, debt service obligations and other intervention mechanisms established by law are recognised components of public financial management and should not be misconstrued as expenditure outside the budget.
Oyedele argued that it was inaccurate to suggest that trillions of naira had been secretly spent without legislative approval, adding that anyone making such allegations should identify the specific projects allegedly executed without appropriation and provide credible evidence.
He also clarified that the IMF’s observations centred on the comprehensiveness, timing and presentation of fiscal reporting under international standards rather than the legality of government expenditure.
“Their treatment for reporting purposes may differ from their presentation in the annual Appropriation Act. Such classification differences should not be misrepresented as evidence of unlawful expenditure,” he said.
The minister further rejected suggestions that the reported amount represented an increase in Nigeria’s budget deficit, explaining that the fiscal deficit is determined by the relationship between total government revenue and total expenditure, irrespective of the lawful financing mechanism used.
He noted that President Bola Tinubu had already initiated reforms to improve fiscal transparency by seeking to eliminate multiple and overlapping budgets and harmonise them into a single framework when he presented the 2026 Appropriation Bill to the National Assembly.
According to Oyedele, the administration remains committed to prudent fiscal management, transparency and accountability, adding that recent reforms in revenue administration, treasury management and the digitalisation of government financial processes have been acknowledged by the IMF and other international institutions.
He urged stakeholders to distinguish between technical observations on fiscal reporting and allegations of illegal spending, stressing that informed public debate should be based on facts and a proper understanding of Nigeria’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 minister said.