By Bassey Udo
The Federal Government does not operate a “shadow budget” or expend public funds outside the constitutional and statutory framework established for public finance, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has clarified.
The Minister made the clarification on Sunday in reaction to recent reports attributed to the International Monetary Fund (IMF) that the Nigerian Government failed to record in its recent budgets public expenditures worth an equivalent of two per cent value of Nigeria’s Gross Domestic Product (GDP).
The alleged irregular expenditures were reportedly captured in the recent IMF Article IV consultation report on Nigeria published on July 1, 2026 by its Resident Representative in Nigeria, Christian Ebeke.
The report had alleged that out of the current valuation of Nigeria’s economy valued at approximately N441.5 trillion, about N8.8 trillion in public funds were spent by the Federal Government entirely outside the statutory framework of Nigeria’s official budget documents, unaccounted for, unaudited, and hidden from the Nigerian people.
FG Response
However, in his official response, the Finance Minister said although the Federal Government noted recent public commentary alleging that approximately two percent of Nigeria’s 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, they amounted to misrepresentations on its public expenditure.
“These claims are incorrect and risk misleading the public regarding the government’s financial management,” the Minister said.
“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,” he clarified.
He said that under Sections 80 – 83 and 162 of the Constitution of the Federal Republic of Nigeria, 1999 (as amended), public funds may only be withdrawn and expended in accordance with the Constitution and laws enacted by the National Assembly.
Accordingly, the Minister said the Federal Government expenditure was incurred pursuant to duly enacted Appropriation Acts, Supplementary Appropriation Acts, and other statutory authorities enacted by the National Assembly.
In addition, he said multi-year capital projects, which necessarily span multiple budgets, were implemented in accordance with extant laws and approved provisions for capital rollovers where applicable.
These, he pointed out, were recognised features of public financial management and should not be misconstrued as expenditures outside the budget.
No secret expenditures
“It is inaccurate to suggest that trillions of Naira have been secretly spent outside legislative approval. Such allegations should have identified the specific projects purportedly executed without appropriation or legal authority and present credible evidence in support of the claim. To be meaningful, assertions of this magnitude must be supported by verifiable facts, rather than conjecture.
“For the purpose of public education, it is important to distinguish between appropriation, expenditure authorisation, financing, and fiscal reporting,” Oyedele said.
Nigeria’s public finance framework, he maintained, contains several statutory transfers, first-line charges and intervention mechanisms established by Acts of the National Assembly.
These, he said, include, among others, statutory allocations and contributions to development commissions and other agencies created by law; cost of collection and cost of administration retained by designated revenue-collecting agencies as expressly provided under relevant legislation; capital expenditure approved in separate budgets for some agencies and the Federal Capital Territory by the National Assembly.
Other expenditures, he said, covered special interventions approved by law to address national priorities, such as security, infrastructure, disaster response, and other strategic national programmes or emergencies as well as debt service obligations and other statutory transfers that were authorised under applicable legislation.
The Minister insisted these expenditures were neither secret nor illegal, as they were not only established by law, but also disclosed in various fiscal reports, and subjected to applicable oversight, audit and accountability mechanisms.
Their treatment for reporting purposes, he noted, may have differed from their presentations in the annual Appropriation Act, particularly under international statistical and reporting standards adopted by the Federal Government, but such classification differences, he pointed out, should not be misrepresented as evidence of unlawful expenditure.
N8.8trillion not an increase to budget deficit
Besides, Oyedele said it was equally incorrect to suggest that the reported N8.8trillion represented an increase in the country’s budget deficit, adding that a fiscal deficit was determined by the relationship between total government revenues and total government expenditures.
“Whether a capital project is financed through annual appropriations, supplementary appropriations, statutory transfers, approved intervention mechanisms, or other lawful financing arrangements does not, by itself, increase the fiscal deficit,” the Minister explained.
“Indeed, the IMF’s observation relates primarily to the comprehensiveness, timing and presentation of fiscal reporting, rather than the legality of expenditure,” he added.
Like many countries, he said Nigeria has continued to strengthen the alignment between budget presentation and international fiscal reporting standards as part of ongoing public financial management reforms.
As a matter of fact, he said President Bola Ahmed Tinubu, had himself formally requested the National Assembly to end the practice of running multiple and overlapping budgets, and rather harmonise into a single, cohesive framework during his presentation of the 2026 Appropriation Bill to a joint session of the National Assembly on December 19, 2025.
“The Federal Government remains firmly committed to prudent fiscal management, transparency and accountability. Recent reforms have significantly strengthened public financial management with ongoing improvements in budget assumptions and credibility, transparent revenue administration, digitalisation of government financial processes, and stronger treasury management.
“These reforms have been acknowledged by the IMF itself and other multilateral institutions, as well as international credit rating agencies, major media organisations and investors.
“Public debate is both welcome and essential in a democratic society. However, it should be based on facts and an accurate understanding of Nigeria’s constitutional and fiscal framework. Mischaracterising technical observations as evidence of unlawful expenditure neither advances informed public discourse nor strengthens democratic accountability.
“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,” he said.
Opposition insist IMF was right
Regardless, some prominent political opposition figures, including the former Vice President and Presidential candidate of the African Democratic Congress (ADC), Atiku Abubakar, and his counterpart in the Nigerian Democratic Congress (NDC), Peter Obi, insist the IMF was right with its observation.
Both cited the 750 kilometers Lagos-Calabar Coastal Highway project valued at over N15.6 trillion, as one of these several off-budget expenditures the IMF referenced.
They accused the Federal Government of awarding the contract without formal bidding and appropriation in the Federal Budget to Hitech Construction Company Ltd, a subsidiary of the Chagoury Group, owned by Gilbert Chagoury, a close associate of President Bola Tinubu,
They called on anti-graft agencies, including the Economic and Financial Crimes Commission (EFCC) and the Independent Corruption and other related Practices Commission (ICPC) to probe the allegations in the IMF report.
