Economists Back US Report, Warn Nigeria’s Weak Fiscal Transparency Could Hurt Investment
Economists have backed the United States’ assessment that Nigeria failed to meet minimum fiscal transparency requirements, warning that weak budget implementation, limited disclosure of public finances and inadequate auditing could undermine investor confidence and economic growth.
The position followed the 2026 Fiscal Transparency Report released by the US Department of State on August 11. The report assessed 140 governments and entities for the period between January 1 and December 31, 2025, and placed Nigeria among 67 that failed to meet the minimum requirements.
Of the 67 countries that fell short, 14 were said to have made significant progress in addressing their shortcomings. Nigeria, however, was listed among those that made no significant progress.
The US assessment identified several weaknesses in Nigeria’s public financial management system. These included delays in publishing the executive budget proposal, incomplete budget information, discrepancies between approved budgets and actual revenue and expenditure, inadequate independence of the country’s supreme audit institution, and limited public access to procurement contracts.
The report noted that although Nigeria made its enacted budget and end-of-year report publicly available, it failed to publish its executive budget proposal within the required timeframe.
It also found that Nigeria’s budget documents did not provide a sufficiently complete picture of government revenue and expenditure, while actual revenues and spending did not reasonably correspond with approved budget figures.
On auditing, the US Department of State said Nigeria’s supreme audit institution did not meet international standards for independence and did not publish substantive reports, despite having access to the government’s executed budget.
Nigeria was, however, credited for publicly disclosing information on debt obligations, including major state-owned enterprise debt. The country was also recognised for maintaining a legal framework for its sovereign wealth fund and for having laws governing the award of natural resource extraction contracts and licences.
Procurement transparency remains a concern
The report further raised concerns over public procurement transparency.
While Nigeria was commended for having laws that establish criteria and procedures for awarding natural resource contracts and licences, the US assessment said information on public procurement contracts was not sufficiently accessible to citizens.
The US criteria require governments to publish basic information on procurement contracts and, for countries with significant natural resource sectors, disclose details such as the area covered, resource being developed, contract duration and company awarded the contract or licence.
Economists demand reforms
Economists who spoke on the report agreed that the findings reflected longstanding weaknesses in Nigeria’s fiscal management.
The Director of the Lagos Business School Public Sector Initiative, Prof. Franklin Ngwu, said uncertainty surrounding budget implementation and repeated extensions of budget timelines were troubling.
He warned that the situation could damage Nigeria’s international reputation and make foreign investors more cautious.
Ngwu called for urgent reforms in fiscal and budget management, urging the Federal Government to give greater attention to the concerns raised in the report.
Similarly, a Professor of Economics and Public Policy at the University of Uyo, Prof. Akpan Ekpo, described the assessment as fair, arguing that Nigeria’s fiscal challenges were already evident within the country.
He called for greater transparency in government borrowing, procurement, revenue and expenditure, as well as stronger scrutiny of the budget process.
Ekpo also warned that the concurrent implementation of multiple budgets could weaken investor confidence and undermine the role of the budget as a tool of macroeconomic management.
The Chief Executive Officer of Economic Associates, Dr Ayo Teriba, also criticised Nigeria’s fiscal reporting practices, saying the government should publish budget performance reports before presenting new budget proposals.
He argued that regular disclosure of actual revenue and expenditure would enable citizens and investors to assess how previous appropriations were implemented.
However, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, said the Federal Government deserved credit for making detailed budget documents available to the public, although he agreed that implementation remained a major challenge.
The economists collectively called for stronger budget implementation, independent auditing, transparent procurement processes and regular publication of actual revenue and expenditure reports.
US recommendations to Nigeria
The US Department of State recommended several measures to help Nigeria improve its fiscal transparency.
It urged the government to:
Publish its executive budget proposal widely and within the required timeframe.
Provide a substantially complete picture of government revenues and expenditures.
Ensure actual revenue and spending correspond reasonably with approved budgets.
Strengthen the independence of the supreme audit institution.
Publish substantive audit reports on government spending.
Make public procurement contract information easily accessible.
Improve the completeness, reliability and accessibility of fiscal information.
The US assessment stressed that fiscal transparency was not simply about publishing a budget. It also involved ensuring that budget information was complete, reliable and accessible enough for citizens, investors and oversight institutions to properly assess government finances.
The department said fiscal transparency helps strengthen public financial management, build market confidence and support economic sustainability.
It also clarified that failing to meet the minimum fiscal transparency requirements should not automatically be interpreted as a corruption rating, noting that the assessment did not measure the level of corruption in a country.
73 countries met the requirements
According to the report, 73 of the 140 governments and entities assessed met the minimum fiscal transparency requirements, while 67 failed to meet them.
Countries listed as meeting the requirements included Ghana, Kenya, Rwanda, South Africa, Uganda, India, Indonesia and Mauritius, among others.
Nigeria was included in the list of countries that did not meet the minimum requirements, alongside countries such as Afghanistan, Algeria, Angola, Bahrain, Bangladesh, Cameroon, Chad, China, Egypt, Ethiopia, Ghana? [Correction: Ghana was listed among those that met the requirements], Niger, Pakistan, Saudi Arabia, Senegal, Sierra Leone, Somalia, South Sudan, Sudan, Tanzania, Togo, Ukraine, Zambia and Zimbabwe.
The US said its assessment could change from year to year as governments improve their public financial management systems and as the assessment criteria are updated.
For Nigeria, the 2026 report presents a mixed picture: the country was recognised for making its enacted budget and end-of-year report accessible, publishing debt information and maintaining legal frameworks for sovereign wealth and natural resource contracts. However, significant shortcomings remain in the completeness, reliability and openness of its public finances.
The latest assessment therefore puts pressure on the Nigerian government to improve fiscal disclosure, strengthen audit independence, ensure better budget implementation and make procurement information more accessible to the public.
