-Budget figures do not add up; audit office not independent, says State Department
-National budget vague on government revenue and expenditures
Nigeria has failed to meet the minimum fiscal transparency requirements for the second consecutive year, with the U.S. Department of State reporting that the country made no significant progress in improving its financial management or opening up its public finances in 2025.
In its newly released 2026 Fiscal Transparency Report, the U.S. State Department assessed 139 governments and the Palestinian Authority, concluding that only 73 met the minimum standards.
Of the 67 countries that did not meet the standards, 14 made significant progress toward compliance, while 53—including Nigeria—were marked as having made no progress.
The report comes amid growing domestic complaints over the poor implementation of Nigeria’s budget, particularly as the current administration runs three budgets (2024, 2025, and 2026) simultaneously.
According to the State Department, the assessment was based on information gathered by the U.S. Embassy in Abuja, other federal agencies, international organizations, and civil society groups between January 1 and December 31, 2025.
The Presidency, in a swift reaction last night, maintained that transparency, accountability, and effective public financial management remain core priorities of the federal government.
A Vague and Inconsistent Budget
However, the U.S. report delivered a damning verdict on Nigeria’s budget process, stating that the national budget remains vague on both government revenues and expenditures.
It specifically accused the federal government of failing to provide a complete picture of its finances during the review period.
“Budget documents did not provide a substantially complete picture of the government’s revenues and expenditures, or break down expenditures to support executive offices in the budget,” the report stated.
According to U.S. criteria, a “substantially complete” budget must show income and spending broken down by ministry, detail revenue by source and type (including oil and non-oil revenues), and disclose financial allocations to state-owned enterprises and special accounts. Nigeria’s documents fell short of these standards.
The department also flagged a credibility gap in budget execution, noting that “actual revenues and expenditures did not reasonably correspond to those in the enacted budget.”
This finding marks a regression for Nigeria compared to the 2025 report, when the U.S. noted that Nigeria’s “budget documents provided a substantially complete picture of the government’s planned expenditures and revenue and were generally reliable.”
Furthermore, while Nigeria published its enacted budget and end-of-year reports online, the government “did not publish its executive budget proposal within a reasonable period.” Under U.S. criteria, the executive proposal must be made public at least one month before the start of the fiscal year and before legislative approval to allow for meaningful public debate.
Audit Office Lacks Independence
The report also targeted Nigeria’s oversight institutions, stating that the Office of the Auditor-General of the Federation (OAuGF) did not meet international standards of independence and failed to publish substantive reports.
The audit office, which is legally mandated to verify public expenditures and publish its findings within 12 months of the end-of-year report, had access to the entire executed budget but failed to publish its audits.
“The supreme audit institution should meet international standards of independence, audit the executed budget, and verify the annual financial statements. The results of such audits… should be published within a reasonable period,” the report stressed, adding that without independent and published reports, citizens and lawmakers lack a critical tool for accountability.
Opaque Procurement and Hidden Contract Details
On public procurement and natural resource extraction, the U.S. report stated that Nigeria’s processes remain opaque. It noted that the government did not publish easily accessible information on public procurement contracts.
For natural resource extraction, the report acknowledged that Nigeria “specified in law the criteria and procedures for awarding contracts and licenses and followed existing regulations in practice.” However, it added that the basic parameters of concessions—such as geographic area, resource types, duration, and the identity of the companies awarded the contracts—were not made public after decisions were reached.
The 2026 report also introduced a new, stricter requirement: governments must now make the terms and conditions of sovereign loans, including liabilities and collateralized assets, publicly accessible. While Nigeria made information on debt obligations (including major state-owned enterprise debt) publicly available, the U.S. Department of State did not assess whether the loan terms met this new standard.
The State Department emphasized that fiscal transparency is not merely a bureaucratic exercise but a critical pillar of public financial management.
“Transparency provides citizens a window into government budgets, and those citizens, in turn, hold governments accountable. It underpins market confidence and growth,” the report noted. It added that while failing the test does not automatically imply corruption, a lack of transparency acts as an enabling factor for corruption, financial crime, and predatory lending.
Despite the criticisms, the State Department acknowledged a few areas where Nigeria met the basic criteria, The government made its enacted budget and end-of-year report widely and easily accessible online, Information on general debt obligations, including major state-owned enterprise debt, was made public, The sovereign wealth fund (Nigeria Sovereign Investment Authority) operates under a sound legal framework and discloses its funding sources and withdrawal criteria.
However, the U.S. government noted that these steps were insufficient to lift Nigeria above the minimum threshold.
To improve fiscal transparency, Washington recommended six key steps:
1. Publish the executive budget proposal online in a timely manner.
2. Provide a detailed, complete breakdown of revenues and expenditures by ministry and source.
3. Clearly detail allocations for executive offices.
4. Ensure actual spending matches the approved budget, offering explanations for significant deviations.
5. Strengthen the independence of the Auditor-General’s office and publish its audit reports.
6. Make public procurement contract details easily accessible.
Globally, the U.S. found that 73 governments met the minimum requirements. The 67 that failed included major economies such as China, Egypt, Saudi Arabia, Pakistan, and Ukraine.
Of the underperforming nations, only 14 made significant progress, including Cameroon, Chad, Ethiopia, Liberia, Libya, Niger, and Senegal. Nigeria was grouped with 53 countries that made no progress, alongside Algeria, Angola, Uganda, Tanzania, The Gambia, Guinea, Mali, Sierra Leone, and Togo.
The release of the report coincides with heated domestic debates over line items in Nigeria’s budget, which include controversial allocations for religious infrastructure, billions of naira earmarked for constituency projects in ministries without direct mandates for them, and duplicated road and school projects across different agencies.
The annual Fiscal Transparency Report is congressionally mandated and is used by Washington to guide foreign assistance and determine eligibility for certain partnership programs.
Presidency Reacts: ‘Transparency Remains Our Priority’
Responding to the report, the Special Adviser to the President on Media and Public Communication, Sunday Dare, stated that Nigeria will continue to implement reforms aimed at strengthening the management, reporting, and disclosure of public resources.
“The report by the U.S. Department of State on fiscal transparency is noted. Fiscal transparency, accountability, and effective public financial management remain important priorities of the federal government,” Dare said.
“It is important, however, to properly contextualize the findings. The U.S. Fiscal Transparency Report is a specific assessment against the Department of State’s minimum requirements… It should, therefore, not be interpreted as a comprehensive assessment of all fiscal reforms currently underway in Nigeria.
“Indeed, the report itself recognizes progress by Nigeria in making budget documents and debt obligations publicly available. The issues identified, particularly around procurement disclosure, budget-execution reporting, and audit processes, are areas the government takes seriously and where ongoing institutional reforms are intended to produce further improvements.”
Dare highlighted initiatives such as the Open Treasury portal, digital procurement reforms, and public debt disclosures as evidence of the government’s commitment to building a credible fiscal system.
BudgIT: Budget Implementation is Vague and Opaque
In contrast, the Country Director of civic tech organization BudgIT, Mr. Vahyala Kwaga, agreed with the U.S. report, arguing that the capital components of the federal budget are often obscured.
“The Nigerian federal budget has been consistently clear in terms of its revenue and expenditure composition. What hasn’t been clear for nearly one fiscal year is the report on budget implementation,” Kwaga said. “It is easy to announce figures, but it appears incredibly difficult for this administration to report on spending and earnings from a consolidated perspective.”
Kwaga also agreed that the Office of the Auditor-General lacks independence. “Neither the scope of his investigative authority nor his personnel are independently managed by his office. While it has been recognized that the audit regime needs to change, the President seems unwilling to sign the Audit Amendment Bill that has been on his desk for months.”
He added that procurement processes are often “observed more in breach than implementation,” noting that procurement journals are not publicized, bid openings lack transparency, and evidence of competitive bidding is frequently absent.
House Probe into ‘Fake’ Investment Council Stalls
The House of Representatives Ad hoc Committee investigating the controversial Presidential Foreign Investment Promotion Council (PFIPC) failed to sit yesterday as scheduled, despite adjourning its last hearing to August 12 for the continuation of the probe.
Journalists, stakeholders, and agency representatives who gathered for the sitting were left without explanations, as neither the committee nor its chairman, Yusuf Gagdi, issued a statement regarding the postponement.
The stall comes at a critical stage of the investigation, which was expected to enter its final phase with testimonies from key government agencies.
The controversy centers on the PFIPC, which has allegedly operated as a federal government agency despite lacking any enabling law, executive order, or legal instrument establishing it.
The issue came to light after lawmakers questioned the inclusion of the purported council in the Appropriation Act, which allocated approximately N1.3 billion to the entity.
The House subsequently set up a 12-member investigative panel led by Gagdi. The probe has since expanded to investigate allegations of forged government documents, unauthorized acquisition of office space, the illegal use of government vehicle number plates, and attempts by the council to secure recognition from various Ministries, Departments, and Agencies (MDAs).
Forged Documents Uncovered
During previous sessions, the Accountant-General of the Federation, Shamseldeen Ogunjimi, told the committee that his office generated a budget code for the council after receiving a letter supposedly originating from the State House. However, verification later revealed the letter was forged.
“The letter received by the Treasury was respectfully addressed as coming from the State House. That letter was never issued by the State House,” Ogunjimi testified.
The committee has so far uncovered approximately 29 allegedly forged official documents linked to the council’s operations.
A key challenge remaining for the committee is the questioning of Mr. Adeyemi, who presented himself as the Director-General of the council. Although the committee ordered the Inspector-General of Police to produce Adeyemi, the police informed lawmakers that he is currently being detained under a court order and cannot be released without judicial authorization.
