Nigeria Fails US Fiscal Transparency Test for Second Year

Nigeria has failed to meet the United States’ minimum fiscal transparency standards for the second consecutive year, with the US Department of State saying the country recorded no significant improvement in public financial management and disclosure in 2025.

The finding was contained in the 2026 Fiscal Transparency Report released by the US Department of State. The assessment covered 139 governments and the Palestinian Authority, with 73 meeting the minimum requirements, while 67 failed to do so.

Of the countries that failed, 14 were said to have made significant progress, while 53, including Nigeria, recorded no significant progress during the review period.

According to the report, Nigeria’s budget documents did not provide a sufficiently complete picture of government revenue and expenditure. It also raised concerns about the relationship between approved budgets and actual spending.

The US government noted that Nigeria’s actual revenues and expenditures did not reasonably correspond with figures contained in the enacted budget. This represented a deterioration from the previous year, when the country’s budget documents were described as generally reliable.

The report further criticised the timing of the publication of Nigeria’s executive budget proposal, noting that it was not released early enough to allow meaningful public debate before legislative approval.

Audit office independence questioned

The US Department of State also expressed concern over the independence and effectiveness of Nigeria’s Office of the Auditor-General of the Federation.

It said the country’s supreme audit institution did not meet international standards of independence and had failed to publish substantive audit reports within a reasonable period.

The report stressed that an independent audit institution and publicly available audit findings were essential to enable lawmakers and citizens to properly scrutinise the management of public funds.

Procurement information remains limited

The report also criticised Nigeria’s public procurement system, saying information on government contracts was not sufficiently accessible to the public.

Although the US acknowledged that Nigeria had legal provisions governing the award of natural resource contracts and licences, it said key details, including the location, duration and companies awarded such concessions, were not made public after decisions were taken.

The report also highlighted a new requirement concerning sovereign loans, under which governments are expected to make loan terms, liabilities and collateralised assets publicly accessible.

The State Department said fiscal transparency was important for strengthening public accountability, improving investor confidence, reducing corruption risks and creating a better environment for businesses.

It, however, clarified that failing the fiscal transparency assessment did not automatically mean that significant corruption existed in a country.

Nigeria records some positive developments

Despite the criticisms, the report acknowledged some areas where Nigeria met the required standards.

It noted that the government had made the enacted budget and end-of-year report publicly available, including online. It also recognised that Nigeria had made information on debt obligations, including debts associated with major state-owned enterprises, accessible to the public.

The country’s sovereign wealth fund was also said to have a sound legal framework and to disclose its funding sources and general approach to withdrawals.

However, the US said these measures were insufficient to move Nigeria above the minimum transparency threshold.

Washington recommended that Nigeria publish its executive budget proposal on time, provide detailed revenue and expenditure information, ensure actual spending aligns with approved budgets, strengthen the independence of the Auditor-General’s office, publish audit reports and improve access to procurement contract information.

Presidency responds

Reacting to the report, Special Adviser to the President on Media and Public Communication, Sunday Dare, said fiscal transparency, accountability and effective public financial management remained priorities of the Federal Government.

Dare said the government was implementing reforms aimed at improving the management, reporting and disclosure of public resources.

He urged that the report be viewed within its proper context, noting that it was an assessment based specifically on the US Department of State’s fiscal transparency requirements and should not be regarded as a comprehensive assessment of all public financial management reforms underway in Nigeria.

According to him, the government had introduced initiatives such as the Open Treasury programme, public budget documentation, debt disclosures and public procurement reforms to improve access to fiscal information.

BudgIT backs US concerns

The Country Director of BudgIT, Vahyala Kwaga, also expressed concerns about Nigeria’s budget implementation and audit system.

Kwaga said while the federal budget generally contained revenue and expenditure figures, information on actual implementation remained inadequate.

He also argued that the Office of the Auditor-General of the Federation lacked sufficient independence and pointed to concerns surrounding the country’s existing audit legislation.

He further criticised the handling of some capital expenditure items, saying several allocations were insufficiently detailed and that information on procurement processes and contracts was often unavailable to the public.

The US report comes as Nigeria prepares for its 2027 budget cycle and is likely to renew calls for greater transparency in the preparation, implementation and auditing of public finances.

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