FGN Denies Claims of ₦8tn ‘Shadow Budget’, Defends Public Spending Framework
Oru Leonard
The Federal Government of Nigeria (FGN), has dismissed claims that over ₦8 trillion, representing about two per cent of Nigeria’s Gross Domestic Product (GDP), was spent outside the approved budget, describing the allegations as inaccurate and misleading.
In a statement issued on Sunday, the Federal Ministry of Finance said recent public commentary referencing the International Monetary Fund’s (IMF) 2026 Article IV Consultation Report had wrongly suggested the existence of a “shadow budget” through which government funds were expended outside constitutional and legislative approval.
The ministry maintained that the Federal Government operates strictly within the provisions of the 1999 Constitution (as amended) and other applicable laws governing public finance.
According to the statement, all federal expenditures are executed under duly enacted Appropriation Acts, Supplementary Appropriation Acts and other statutory authorities approved by the National Assembly. It added that multi-year capital projects spanning several budget cycles are implemented in line with existing laws and approved capital rollover provisions.
The government stressed that there was no evidence of trillions of naira being secretly spent outside legislative approval, noting that any such allegation should identify specific projects and provide verifiable evidence rather than relying on speculation.
The ministry further explained that Nigeria’s public finance system includes several statutory transfers, first-line charges and intervention mechanisms established by Acts of the National Assembly. These cover statutory allocations to development commissions and agencies, revenue collection costs, separately approved capital budgets for certain agencies and the Federal Capital Territory, special interventions for national priorities such as security and infrastructure, as well as debt service obligations.
It noted that these expenditures are lawful, publicly disclosed and subject to oversight, audit and accountability mechanisms, adding that differences in their presentation under international fiscal reporting standards should not be misconstrued as illegal spending.
The Federal Government also rejected suggestions that the reported amount had increased the country’s fiscal deficit, explaining that the deficit is determined by the relationship between total government revenue and expenditure, rather than by the financing mechanism for approved projects.
According to the ministry, the IMF’s observations relate mainly to the comprehensiveness, timing and presentation of fiscal reporting, not the legality of government expenditure.
The statement recalled that President Bola Ahmed Tinubu had, during the presentation of the 2026 Appropriation Bill to the National Assembly on December 19, 2025, called for the harmonisation of multiple and overlapping budgets into a single, cohesive fiscal framework.
The ministry said the government remains committed to prudent fiscal management, transparency and accountability, highlighting reforms aimed at improving budget credibility, revenue administration, digitalisation of financial processes and treasury management.
It added that these reforms have received positive recognition from the IMF, other multilateral institutions, international credit rating agencies, investors and global media organisations.
The Federal Government urged Nigerians to base public discourse on verified facts and a proper understanding of the country’s constitutional and fiscal framework, reaffirming its commitment to strengthening fiscal governance in line with international best practices.
