FG Denies ₦8tn ‘Shadow Budget’ Claim, Says All Spending Backed by Law

The Federal Government has dismissed claims that more than ₦8 trillion—equivalent to about two per cent of Nigeria’s Gross Domestic Product (GDP)—was spent outside the approved budget, describing the reports as inaccurate and misleading.

In a statement issued on Sunday, the Federal Ministry of Finance said the allegations, which referenced comments attributed to the IMF Representative in Nigeria and the Fund’s 2026 Article IV Consultation Report, wrongly suggested that the government operates a “shadow budget.”

The ministry stressed that all federal expenditures are carried out strictly within the constitutional and legal framework governing public finance.

According to the statement, Sections 80–83 and 162 of the 1999 Constitution (as amended) require that public funds can only be withdrawn and spent in accordance with laws passed by the National Assembly. It added that government spending is executed through duly approved Appropriation Acts, Supplementary Appropriation Acts and other statutory authorisations.

The ministry explained that multi-year capital projects and approved capital rollovers are standard features of public financial management and should not be interpreted as spending outside the budget.

“It is inaccurate to suggest that trillions of naira have been secretly spent outside legislative approval,” the statement said, challenging those making the claims to provide verifiable evidence and identify specific projects allegedly executed without legal authorisation.

The ministry further clarified that Nigeria’s public finance system includes statutory transfers, first-line charges and intervention mechanisms established by Acts of the National Assembly, including allocations to development commissions, debt service obligations, security interventions, infrastructure projects and disaster response programmes.

It noted that while these expenditures may be presented differently under international fiscal reporting standards, they remain lawful, transparent and subject to oversight and audit.

The Federal Government also rejected claims that the reported amount represented an increase in the country’s fiscal deficit, explaining that deficits are determined by the relationship between total government revenue and expenditure, not by the financing mechanism for approved projects.

According to the ministry, the IMF’s observations were focused on improving the comprehensiveness and presentation of Nigeria’s fiscal reporting rather than questioning the legality of government spending.

The statement recalled that President Bola Ahmed Tinubu had already urged the National Assembly during the presentation of the 2026 Appropriation Bill to harmonise multiple and overlapping budgets into a single, cohesive fiscal framework.

The ministry reaffirmed the Tinubu administration’s commitment to prudent fiscal management, transparency and accountability, noting that ongoing reforms in budget credibility, revenue administration, digitalisation of government financial processes and treasury management have received recognition from the IMF, other multilateral institutions, international credit rating agencies and investors.

It urged Nigerians to base public discourse on verified facts and an accurate understanding of the country’s fiscal framework, stressing that technical observations should not be misconstrued as evidence of unlawful government expenditure.