Valentine Okafor
BudgIT, has raised concerns after the findings of the United States Department of State’s 2026 Fiscal Transparency Report, which shows that Nigeria has failed to meet minimum fiscal transparency requirements for the second consecutive year and made no significant progress in addressing identified weaknesses in the management and disclosure of public finances.
The assessment, which reviewed Nigeria’s fiscal transparency practices between 1 January and 31 December 2025, places Nigeria among 67 of the 140 governments and entities assessed that failed to meet the minimum requirements. Of the governments that failed, only 14 were assessed as having made significant progress in addressing identified deficiencies; Nigeria was not among them.
While the Fiscal Transparency Report is a specific assessment of fiscal disclosure and should not be interpreted as a comprehensive assessment of every public financial management reform underway in Nigeria, its findings should not be dismissed. They reinforce concerns that have become increasingly evident in Nigeria’s fiscal management, particularly around the credibility of budget implementation reports, the independence and effectiveness of the country’s audit institution, and the accessibility of public procurement information. These are not merely technical issues; they directly affect citizens’ ability to understand how public resources are raised, allocated and spent.
Of particular concern is the report’s finding that Nigeria’s budget documents did not provide a substantially complete picture of government revenues and expenditures, while actual revenues and expenditures did not reasonably correspond with the enacted budget. This represents a significant concern for budget credibility. A budget is not simply an annual statement of government intentions; it is the principal framework through which the government communicates its fiscal priorities and commits public resources. When citizens cannot readily establish what the government planned to receive and spend, and what was actually received and spent, meaningful public accountability becomes difficult.
BudgIT is particularly concerned that, while the Federal Government has continued to publish budget documents, the reporting of actual budget implementation remains inadequate. It is relatively easy to announce approved budget figures, but it is considerably more important to provide timely and consolidated information on actual revenue collection and expenditure. Nigeria has adopted the International Public Sector Accounting Standards (IPSAS) since 2016. As such, the principles of transparency and accountability embedded in globally accepted public-sector financial reporting should therefore be reflected in the quality, timeliness and completeness of fiscal reports.
The report also highlights a persistent weakness in Nigeria’s audit architecture. The U.S. assessment found that the Office of the Auditor-General for the Federation does not meet international standards of independence and has not published substantive audit reports as required. An effective supreme audit institution is central to accountability because it provides an independent assessment of how public resources have been utilised and whether government spending complies with approved appropriations and applicable laws. Without sufficient institutional independence and timely publication of audit findings, the National Assembly, civil society and citizens are deprived of a critical mechanism for scrutinising public expenditure.
BudgIT therefore reiterates the importance of completing long-overdue reforms to Nigeria’s audit framework. The continued reliance on an outdated legal framework for public auditing limits the ability of the Auditor-General’s office to operate with the independence, authority and institutional capacity required in a modern public financial management system. Strengthening the independence of the Auditor-General should be treated as an urgent governance reform rather than a peripheral legislative matter.
Public procurement is another major area requiring immediate attention. The report found that accessible information on public procurement contracts was not sufficiently available to the public. This concern is consistent with the wider challenge of citizens being unable to follow the procurement process from the publication of opportunities through bidding, award, contract execution and completion. Although procurement laws provide a framework for competitive processes, transparency requires that the evidence of those processes is itself publicly accessible. Procurement journals, bid-opening information, contract awards, contract values, implementation status and variations should be routinely disclosed.
The same concern applies to natural-resource contracts. While the report acknowledges that Nigeria has legal criteria and procedures for awarding extractive-sector contracts and licences, it notes that basic information about concessions (including geographic area, resources, duration and the companies awarded contracts) was not made public after decisions were taken. Given the importance of natural resources to Nigeria’s public finances, greater disclosure in this area is essential for strengthening public trust and ensuring that citizens can determine whether the country is receiving fair value from its natural assets.
BudgIT acknowledges the areas in which the U.S. assessment recognised progress. Nigeria has made its enacted budget and end-of-year report publicly accessible, while information on government debt obligations, including major debts of state-owned enterprises, has also been made available. The report further recognised the existence of a sound legal framework for the Sovereign Wealth Fund. These developments are important and should be sustained and expanded. However, publishing documents alone does not constitute effective fiscal transparency if the information is incomplete, delayed, difficult to reconcile or insufficient to enable citizens to meaningfully scrutinise public spending.
Commenting, BudgIT’s Head of Research and Policy Advisory, Engr. Adejoke Akinbode states that as Nigeria prepares for the 2027 budget cycle, the Federal Government should treat the findings of this second consecutive assessment as an opportunity to undertake a comprehensive review of its fiscal disclosure architecture. The Executive Budget Proposal should be published sufficiently early to allow meaningful public and legislative scrutiny. Budget documents should provide a complete breakdown of revenues and expenditures by source, ministry, department and agency, while significant deviations between approved and actual spending should be clearly explained. The government should also strengthen the independence of the Auditor-General’s office, ensure timely publication of audit reports and make procurement and contract information accessible to the public. These are among the key reforms identified by the State Department itself.
For BudgIT, the objective should not be to pass an external transparency test merely for the sake of improving Nigeria’s international standing. The more important objective is to build a fiscal system in which citizens can confidently understand how much government earns, how much it plans to spend, how much it actually spends, who receives public funds and what outcomes are delivered with those resources. Fiscal transparency must ultimately translate into fiscal accountability and better public services.
Nigeria’s second consecutive failure should therefore serve as a call for action rather than a point of political contention. The Federal Government’s commitment to improving fiscal transparency and public financial management is welcome, but that commitment must now be demonstrated through measurable improvements in the timeliness, completeness, comprehensiveness and credibility of fiscal reporting, stronger audit institutions and meaningful disclosure of public contracts. As the country enters another budget cycle, the priority should be to close these longstanding gaps and build a public finance system that Nigerians can trust.