Nigeria Fails US Fiscal Transparency Test for Second Year Running

Nigeria has failed to meet the United States’ minimum fiscal transparency requirements for the second consecutive year, with a new US State Department report highlighting weaknesses in budget reporting, auditing and public procurement.

The finding was contained in the 2026 Fiscal Transparency Report, which assessed 139 governments and the Palestinian Authority.

According to the report, only 73 governments met the minimum fiscal transparency standards, while 67 failed to meet the requirements.

Of those that fell short, 14 made significant progress during the review period, while 53 countries, including Nigeria, were assessed as making no significant progress.

The assessment covered information gathered between January 1 and December 31, 2025, from sources including the US Embassy in Abuja, government agencies, international organisations and civil society groups.

US flags gaps in Nigeria’s budget reporting

One of the major concerns raised by the US State Department was the quality and completeness of Nigeria’s budget information.

The report said Nigeria’s budget documents did not provide a sufficiently complete picture of government revenue and expenditure.

Under the US assessment criteria, a transparent national budget should provide detailed information on government income and spending, including revenue sources, ministry-level expenditure and allocations involving state-owned enterprises and special accounts.

The report also questioned the reliability of Nigeria’s budget execution, noting that actual government revenue and expenditure did not reasonably correspond with figures contained in the enacted budget.

This represents a deterioration from the previous assessment.

In its 2025 report, the US had described Nigeria’s budget documents as providing a substantially complete picture of planned revenue and expenditure.

The latest assessment also noted that Nigeria did not publish its executive budget proposal within the period considered reasonable under the US transparency requirements.

Such a proposal should be made available before the beginning of the fiscal year and before legislative approval to allow citizens and lawmakers to properly examine the government’s plans.

Auditor-General’s office criticised

The US report also raised concerns about the independence and effectiveness of Nigeria’s supreme audit institution, the Office of the Auditor-General for the Federation.

According to the assessment, the institution did not meet international standards for independence and had not published substantive audit reports within the required timeframe.

The report stressed that an independent audit institution is essential for verifying government spending and ensuring that public officials can be held accountable for the use of public funds.

It noted that citizens and lawmakers are left without an important accountability mechanism when audit findings are not independently produced and publicly released.

Public procurement information remains limited

The report further criticised Nigeria’s approach to public procurement.

It said information on government contracts was not sufficiently accessible to the public.

Concerns were also raised about transparency surrounding natural-resource concessions.

Although Nigeria has laws establishing criteria and procedures for awarding extraction licences and contracts, the report said important details about awarded concessions were not made publicly available.

These include information about the geographic area involved, the resource concerned, the duration of the concession and the company receiving the award.

The 2026 assessment also introduced a stronger requirement concerning sovereign loans, including disclosure of loan terms, liabilities and collateralised assets.

US explains why fiscal transparency matters

The US State Department said fiscal transparency goes beyond simply publishing government documents.

According to the report, transparent public finances help citizens understand how taxes and government revenue are spent while strengthening accountability.

It also said transparency can improve investor confidence, reduce opportunities for corruption and create a more competitive environment for businesses.

The report cautioned, however, that failing the fiscal transparency assessment does not automatically establish that significant corruption exists in a country.

Rather, it said a lack of transparency could create conditions that enable corruption, financial crimes, unfair practices and predatory financial activities.

Nigeria records some areas of progress

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

The US acknowledged that Nigeria made its enacted budget and end-of-year financial report easily accessible to the public, including through online platforms.

Nigeria also made information concerning its debt obligations, including debt associated with major state-owned enterprises, publicly available.

The country’s sovereign wealth fund was also credited with having a legal framework that discloses its funding sources and general approach to withdrawals.

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However, the State Department concluded that these improvements were insufficient to bring Nigeria above the minimum transparency threshold.

US recommends six key reforms

The US State Department recommended several measures Nigeria could take to improve its fiscal transparency.

Among them are:

• Publishing the executive budget proposal online well before the start of the fiscal year.
• Providing detailed revenue and expenditure information by ministry and source.
• Clearly identifying spending allocated to executive offices.
• Ensuring actual government spending corresponds with the approved budget or explaining major deviations.
• Strengthening the independence of the Auditor-General’s office and publishing audit reports.
• Making government procurement and contract information more accessible to the public.

BudgIT backs US concerns

BudgIT also raised concerns about Nigeria’s budget implementation and audit framework.

The organisation’s Country Director, Vahyala Kwaga, said the federal budget was generally clear in terms of its revenue and expenditure structure but argued that information about actual budget implementation remained inadequate.

He also questioned the independence of the Auditor-General’s office and raised concerns about the availability of procurement information and debt sustainability analysis.

Kwaga further argued that some capital expenditure items were insufficiently detailed, making it difficult for citizens to determine precisely how public funds were being allocated and spent.

Presidency responds to US report

The Presidency said the Federal Government recognised the findings but rejected the suggestion that the report represented a complete assessment of Nigeria’s fiscal management reforms.

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 government.

According to him, Nigeria is implementing reforms designed to improve the management, reporting and disclosure of public resources.

He pointed to initiatives including the Open Treasury programme, public budget documentation, debt disclosures and reforms to public procurement.

Dare said the government’s response would be to strengthen areas identified by the report rather than dismiss its findings.

He added that Nigeria remained committed to improving fiscal reporting, strengthening audit institutions and expanding public access to procurement information.

Nigeria faces renewed pressure ahead of 2027 budget

The latest US assessment comes as Nigeria prepares for another budget cycle.

With the country failing the minimum US fiscal transparency requirements for a second consecutive year, the report is likely to intensify calls for greater disclosure of government revenue, expenditure, procurement contracts and audit findings.

The Federal Government now faces pressure to demonstrate measurable improvements in public financial management as preparations for the 2027 budget gather momentum.