No Shadow Budget, Says FG As It Rebuts IMF Report On Public Spending
Federal Government Counters IMF Allegations
THE Federal Government has firmly rejected claims that it operates a shadow budget or spent more than ₦8 trillion outside Nigeria’s approved fiscal framework, insisting that every government expenditure is backed by constitutional and statutory provisions.
The rebuttal followed observations contained in the International Monetary Fund (IMF)’s 2026 Article IV Consultation, which suggested that about two per cent of Nigeria’s Gross Domestic Product (GDP) had been spent through off-budget capital expenditures, creating discrepancies between reported fiscal deficits and actual financing requirements.
Responding to the report, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, described the claims as inaccurate and potentially misleading.
Government Insists Spending Follows Constitutional Process
According to the minister, Nigeria’s public finance system does not permit the withdrawal or expenditure of public funds outside constitutional procedures.
He explained that all federal expenditures are authorised through Appropriation Acts, Supplementary Appropriation Acts, statutory transfers and other legally recognised financial mechanisms approved by the National Assembly.
Oyedele maintained that government spending remains fully compliant with Sections 80 to 83 and Section 162 of the 1999 Constitution, stressing that there is no parallel or hidden budgeting framework.
He argued that suggestions that trillions of naira were secretly spent outside legislative approval lacked credible evidence and failed to identify any specific projects allegedly financed outside the legal appropriation process.
Capital Rollovers Not Evidence of Hidden Spending
The minister clarified that many large infrastructure projects extend beyond a single fiscal year and are implemented through approved capital rollover provisions permitted under existing financial regulations.
According to him, such multi-year financing arrangements are standard public financial management practices and should not be interpreted as extra-budgetary expenditure.
He further explained that differences between budget presentation and international fiscal reporting standards often account for perceived discrepancies highlighted in international assessments.
Understanding Nigeria’s Fiscal Architecture
Oyedele noted that Nigeria’s fiscal framework includes several expenditure channels established by law.
These include statutory transfers to development commissions and agencies, debt servicing obligations, intervention programmes, capital allocations for specialised agencies, security spending and emergency response mechanisms.
He emphasised that such expenditures are publicly recognised under existing legislation and remain subject to oversight by relevant institutions, including the National Assembly and audit authorities.
According to him, their classification under international accounting standards may differ from how they appear in annual appropriation documents, but this does not make them illegal or secret.
FG Says IMF Observation Relates to Reporting Standards
The minister argued that the IMF’s concerns relate primarily to fiscal reporting methodology rather than unlawful government spending.
He acknowledged that Nigeria continues to improve the alignment of its budget reporting with international standards as part of broader public financial management reforms.
Oyedele also referenced President Bola Tinubu’s earlier request to the National Assembly to consolidate multiple and overlapping budgets into a unified fiscal framework in order to improve transparency and accountability.
Commitment to Fiscal Reforms
The Federal Government reiterated its commitment to prudent fiscal management, transparency and responsible public finance administration.
Oyedele highlighted ongoing reforms aimed at strengthening treasury management, improving revenue administration, expanding digital financial systems and enhancing budget credibility.
He added that while public scrutiny remains essential in a democracy, fiscal debates should be guided by verifiable facts and an accurate understanding of Nigeria’s constitutional and legal financial framework.
