No “Shadow Budget” in Nigeria’s Public Finance, Finance Minister Insists Amid IMF Claims

The Minister of Finance and Coordinating Minister for the Economy, Taiwo Oyedele, has firmly dismissed allegations that the Federal Government operates a “shadow budget,” insisting that all public spending is carried out strictly within Nigeria’s legal and constitutional framework.

In a detailed statement issued on Monday in Abuja, Oyedele responded to recent concerns raised by the International Monetary Fund, stressing that government finances are transparent, regulated, and subject to legislative oversight.

The clarification comes after comments by the IMF Resident Representative in Nigeria, Christian Ebeke, who suggested that Nigeria may have failed to formally capture public spending amounting to about two per cent of its Gross Domestic Product (GDP) in recent official budgets.

Ebeke indicated that the discrepancy largely involved massive government infrastructure projects executed entirely outside the formal budget framework. He further argued that such practices could artificially reduce Nigeria’s official fiscal deficit while obscuring the country’s true financing requirements and weakening fiscal transparency.

But the Federal Government swiftly pushed back, rejecting any suggestion of off-book spending or unrecorded fiscal operations.

According to Oyedele, concerns circulating in public discourse about unrecorded spending amounting to over eight trillion Naira are inaccurate and misleading.

The minister stated:

“These claims are incorrect and risk misleading the public regarding the government’s financial management.

“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80 – 83 and 162 of the Constitution of the Federal Republic of Nigeria, 1999 (as amended), public funds may only be withdrawn and expended in accordance with the Constitution and laws enacted by the National Assembly.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, Federal Government expenditure is incurred pursuant to duly enacted Appropriation Acts, Supplementary Appropriation Acts, and other statutory authorities enacted by the National Assembly.

“In addition, multi-year capital projects which necessarily span multiple budgets are implemented in accordance with extant laws and approved provisions for capital rollovers where applicable,” he said.

Oyedele maintained that what some observers interpret as “off-budget” spending are, in fact, standard features of public financial management systems used globally, particularly in economies managing large infrastructure pipelines.

He added that it was misleading to interpret such arrangements as evidence of unapproved 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,” he said.

Beyond rebutting the IMF-linked concerns, the minister also used the opportunity to clarify how Nigeria’s fiscal operations are structured, noting that public finance involves multiple statutory layers that are often misunderstood in public debate.

Oyedele explained that for the purpose of public education, it is important to distinguish between appropriation, expenditure authorisation, financing, and fiscal reporting.

He said Nigeria’s public finance framework contains several statutory transfers, first-line charges, and intervention mechanisms established by Acts of the National Assembly.

Among these, he listed statutory allocations and contributions to development commissions and other agencies created by law, alongside cost-of-collection and administrative deductions legally retained by revenue-collecting agencies.

Others include capital expenditure approved in separate budgets for certain agencies and the Federal Capital Territory, special intervention funds approved to address national priorities, and debt service obligations as well as other statutory transfers authorised under applicable legislation.

Oyedele was emphatic that these processes are neither concealed nor irregular.

“These expenditures are neither secret nor illegal. They are established by law, disclosed in various fiscal reports, and subject to applicable oversight, audit and accountability mechanisms.

“Their treatment for reporting purposes may differ from their presentation in the annual Appropriation Act, particularly under international statistical and reporting standards adopted by the Federal Government.

“Such classification differences should not be misrepresented as evidence of unlawful expenditure,” he said.

As debates over Nigeria’s fiscal transparency continue, the government maintains that its budgeting system remains anchored on constitutional provisions and legislative approval, even as international observers call for greater clarity in how complex public expenditures are reported and interpreted.