Business
Nigerian govt not operating “shadow budget” – Finance Minister
The Federal Government has dismissed claims that it spent more than ₦8 trillion outside the approved budget, insisting that it does not operate a “shadow budget” and that all public expenditures are carried out within the framework of the Constitution and relevant laws.
In a statement issued on Sunday, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, described recent public commentary suggesting that about two per cent of Nigeria’s Gross Domestic Product (GDP) was spent outside legislative approval as inaccurate and misleading.
The minister said the claims, reportedly linked to references made by the International Monetary Fund (IMF) and its 2026 Article IV Consultation Report, created a false impression about the Federal Government’s financial management practices.
“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,” Mr Oyedele stated.
He explained that under Sections 80 to 83 and 162 of the 1999 Constitution, as amended, public funds may be withdrawn and spent only in accordance with constitutional provisions and laws enacted by the National Assembly.
According to him, federal expenditures are undertaken through duly enacted Appropriation Acts, Supplementary Appropriation Acts and other statutory authorisations approved by lawmakers.
The minister also noted that multi-year capital projects, which often extend beyond a single fiscal year, are implemented under existing legal provisions, including approved capital rollovers where necessary.
He argued that such arrangements are standard features of public financial management and should not be interpreted as spending outside the budget.
Mr Oyedele challenged those making the allegations to provide evidence of specific projects allegedly executed without appropriation or legal authorisation.
“Such allegations should have identified the specific projects purportedly executed without appropriation or legal authority and present credible evidence in support of the claim,” he said.
The minister further explained that Nigeria’s fiscal framework includes several statutory transfers, first-line charges and intervention mechanisms established by Acts of the National Assembly.
These include statutory allocations to development commissions and agencies created by law, cost-of-collection provisions for revenue-generating agencies, capital expenditures approved through separate budgets, special interventions addressing national priorities, as well as debt service obligations and other statutory transfers.
He stressed that these expenditures are lawful, publicly disclosed and subject to oversight, audit and accountability mechanisms.
According to Mr Oyedele, differences between how such expenditures are reported in fiscal documents and how they appear in annual appropriation laws often arise from international reporting standards and should not be misconstrued as evidence of unlawful spending.
The minister also rejected suggestions that the reported amount represented an increase in Nigeria’s fiscal deficit.
He explained that fiscal deficits are determined by the relationship between total government revenues and expenditures, adding that the source of financing for approved projects does not automatically increase the deficit.
Mr Oyedele said the IMF’s observations were largely focused on improving the comprehensiveness, timing and presentation of fiscal reporting rather than questioning the legality of government spending.
He recalled that President Bola Tinubu had, during the presentation of the 2026 Appropriation Bill to the National Assembly in December 2025, advocated harmonising multiple and overlapping budgets into a single, cohesive framework.
The minister reaffirmed the Federal Government’s commitment to transparency, accountability and prudent fiscal management, noting that ongoing reforms have strengthened budget credibility, revenue administration, treasury management and the digitalisation of government financial processes.
READ ALSO: Oyedele confirms Nigeria has drawn first $1.5 billion under $5 billion Abu Dhabi financing deal
He added that these reforms have received recognition from the IMF, other multilateral institutions, international credit rating agencies, investors and major global media organisations.
While welcoming public scrutiny of government finances, Mr Oyedele urged commentators to ensure that debates are based on facts and a proper understanding of Nigeria’s constitutional and fiscal framework.
“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 further to strengthen fiscal governance in line with international best practices,” he said.
Dangote Refinery will open the order book for its initial public offering to retail investors on 14 September, effectively kickstarting the $1.5 billion public share sale, said to be the continent’s biggest ever, Reuters reported Friday, citing two sources who have close knowledge of the move.
Pricing will commence at any moment now at N525 per share ($0.40), with 4.1 billion shares up for subscription, the report added, noting that the sources spoke on the understanding that their identities will not be disclosed.
The crude processing plant, which holds the distinction of being the world’s largest single-train refinery, will have the latitude to sell 15 per cent of the offer size in addition to the total number of shares up for grabs in the event the transaction is oversubscribed, a source was quoted as saying.
The facility, owned by Africa’s richest man, Aliko Dangote, is ready to double nameplate capacity to 1.4 million barrels per day (bpd).
Financing will be provided by proceeds from both the planned equity sale and a private placement held in July, which raised $2.5 billion from institutional investors and high-net-worth individuals. It was 270 per cent oversubscribed.
Another refinery, the size of the current one at 700,000 bpd, is to be established in the coastal town of Lamu in Kenya, strategically conceived by the Dangote Group as the gateway to the broader East African market.
READ ALSO: Dangote Cement sets date for London capital markets day ahead of LSE listing
Last month, the group offered a 30 per cent stake in the proposed refinery to countries in the region, including Kenya, Rwanda and Ethiopia.
The groundbreaking is scheduled for this month.
Dangote Refinery is exploring a cross-border listing on the Johannesburg Stock Exchange, the continent’s foremost bourse, following a primary listing in Lagos.
The corporation said in August that a London listing, which its sister company, Dangote Cement, is actively pursuing, is not on the cards, adding that a potential listing in the UK capital is at least three years away.
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President Bola Tinubu has welcomed the planned launch of the African Credit Rating Agency (AfCRA), saying Africa needs financial institutions that better understand the continent’s economies and risks.
The African Union has announced that the agency will officially launch on 7 October in Port Louis, Mauritius.
President Tinubu said the development was another step towards building African financial institutions capable of providing more accurate assessments of the continent’s economies.
The president disclosed this in a post on his official X account on Thursday, recalling that he had advocated for an African credit rating agency in a February 2026 Financial Times article.
He said he also raised the issue at the Africa CEO Forum in Kigali, Rwanda, in May, where he called for Africa to develop financial institutions that understand its economic realities.
“Africa is not asking for favourable ratings. We are asking for fair ratings, grounded in our fundamentals and in the reforms our economies are actually carrying out,” he said.
Why the agency matters
Credit ratings influence how investors assess the risk of lending to countries and companies. They can also affect borrowing costs and the amount of capital available to governments and businesses.
African governments have repeatedly raised concerns about what they describe as an “Africa premium”, under which African countries may face higher borrowing costs because of how investors perceive the continent’s risks.
The three major global rating agencies, including Fitch, Moody’s and S&P Global Ratings, currently play a major role in assessing African sovereign and corporate borrowers.
President Tinubu, in an article published by Financial Times, argued that African economies were paying too much to borrow because international assessments did not always adequately capture their economic realities.
He cited a 2023 United Nations Development Programme estimate that shortcomings in credit ratings cost African countries about $75 billion annually through higher interest payments and foregone lending.
He also argued that commodity-dependent African economies could be particularly exposed to downgrades during global market downturns, even when their reserves, fiscal positions, and debt profiles remained manageable.
The proposed agency is therefore expected to provide an Africa-focused alternative by taking greater account of local economic conditions and reforms.
The African Union has said that AfCRA will operate alongside existing global rating agencies rather than replace them.
Tinubu seeks investor confidence
In his statement Thursday, the president said the establishment of an African rating agency should not be interpreted as a demand for preferential treatment.
READ ALOS: US court case on Tinubu’s past forfeiture is civil, not criminal matter – Presidency
Rather, he said, the agency must provide assessments based on economic fundamentals and the reforms being implemented by African countries.
He pointed to Nigeria’s experience, arguing that improvements in economic data, fiscal transparency and reforms had contributed to recent upgrades by international rating agencies.
However, he acknowledged that the credibility of AfCRA would ultimately depend on the quality and independence of its assessments.
“AfCRA must now earn the confidence of global capital. That confidence will rest on its independence and the rigour of its work,” he noted.
The launch is scheduled for 7 October in Mauritius, with President Tinubu saying he looks forward to the development.
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