Zainab Abioye
Nigeria has failed the United States’ minimum fiscal transparency assessment for the second consecutive year, with Washington faulting the country over weaknesses in budget preparation, execution, auditing and public procurement disclosure.
The finding is contained in the 2026 Fiscal Transparency Report released by the US Department of State on August 11, 2026, following an assessment of 140 governments and entities covering the period from January 1 to December 31, 2025.
Nigeria was among 67 governments that failed to meet the minimum transparency requirements, while 73 passed the assessment.
Of the 67 countries that failed, 14 were considered to have made significant progress in addressing previously identified deficiencies.
Nigeria was not among them.
The latest assessment raises fresh questions about the country’s management of public finances at a time when the Federal Government is pursuing increased revenue mobilisation, fiscal reforms and measures aimed at restoring investor confidence.
The US assessment identified shortcomings in Nigeria’s budget process, including the failure to publish the executive budget proposal within a reasonable timeframe.
It also said the country’s budget documents did not provide a substantially complete picture of government revenues and expenditures.
The report noted that although Nigeria made its enacted budget and end-of-year report widely accessible, including online, the executive budget proposal was not published within the required period.
It further found discrepancies between the revenues and expenditures contained in the enacted budget and the actual figures recorded.
According to the assessment, “actual revenues and expenditures did not reasonably correspond to those in the enacted budget.”
Audit system under scrutiny
The United States also raised concerns about Nigeria’s supreme audit institution, saying it did not meet international standards for independence and failed to publish substantive audit reports.
The assessment, however, acknowledged that the audit institution had access to the entire executed budget.
The finding is significant because effective public auditing is central to ensuring that government agencies account for how appropriated funds are spent.
The report also highlighted shortcomings in public procurement transparency, particularly the accessibility of information on government contracts.
Although Nigeria was credited with having laws that establish procedures and criteria for awarding natural resource extraction contracts and licences, the US said basic information on public procurement contracts was not sufficiently available to citizens.
For countries with major natural resource sectors, the transparency requirements also cover the publication of contracting and licensing procedures as well as details of awarded concessions.
Such information includes the geographical area covered by a concession, the resource being developed, the duration of the agreement and the identity of the company awarded the contract or licence.
Nigeria gets credit for debt disclosure
Despite the shortcomings, the US report acknowledged areas where Nigeria performed better.
It credited the country with making information about its debt obligations publicly available, including major debts incurred by state-owned enterprises.
Nigeria was also recognised for having a sound legal framework governing its sovereign wealth fund, including provisions covering its funding sources and the general approach to withdrawals.
The positive findings, however, were not enough to lift Nigeria above the minimum fiscal transparency threshold.
$6.4bn off-budget spending allegation
The assessment comes against the backdrop of concerns about the completeness of Nigeria’s public financial records.
International Monetary Fund data cited in the report showed roughly ₦8.8tn, equivalent to about two per cent of Nigeria’s GDP, in unrecorded or off-budget public spending.
The Nigerian government has rejected the IMF’s assessment.
Concerns have also been raised over overlapping budgetary allocations, with reports suggesting that at least ₦210bn was involved in potentially duplicative allocations.
The issues have heightened scrutiny of fiscal discipline as Nigeria grapples with rising debt obligations and pressure to expand government revenues.
Transparency key to investor confidence
The US Department of State said fiscal transparency was essential to effective public financial management, market confidence and long-term economic sustainability.
It said greater openness in government finances enables citizens to scrutinise public spending and participate meaningfully in debates over the management of national resources.
The department stressed, however, that the assessment should not be interpreted as a corruption ranking.
According to the US government, failure to meet minimum fiscal transparency standards does not automatically mean that significant corruption exists within a government.
Similarly, passing the assessment does not necessarily mean that a country has a low level of corruption.
Ghana, Kenya among countries that passed
While Nigeria failed the assessment, several African countries met the minimum requirements.
They included Ghana, Kenya, Rwanda, South Africa and Uganda.
India, Indonesia, Morocco and Mauritius were also among countries that passed.
The US Department of State explained that a country’s assessment could change from year to year as transparency requirements are strengthened or as governments improve or weaken their public financial management systems.
The 2026 assessment introduced a stronger requirement for governments to make the terms and conditions of sovereign loans to foreign borrowers publicly accessible.
The requirement includes information on liabilities and collateralised assets.
The assessment was based on information obtained from US diplomatic missions, other American government agencies, international organisations and civil society groups.
For Nigeria, the latest failure puts renewed pressure on the Federal Government to improve the timeliness, completeness and accessibility of budget information, strengthen independent auditing and make public procurement records more transparent.
It also presents another test of the government’s pledge to improve fiscal management and create a more predictable environment for citizens, businesses and investors.
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