The US Department of State says Nigeria has failed to meet the minimum fiscal transparency requirements for the second consecutive year.
Fiscal transparency, like independence of the judiciary and other institutions, is key to investors’ confidence in any country.
In its 2026 Fiscal Transparency Report published on August 11, the US Department of State said Nigeria made no significant progress in addressing deficiencies identified in its public financial management and disclosure practices.
The report assessed 140 governments and entities, including the Palestinian Authority, over the period from January 1 to December 31, 2025.
Nigeria was among 67 governments that failed to meet the minimum requirements, while 73 governments passed the assessment.
Nigeria was not among the 14 governments that were judged to have made significant progress towards addressing their deficiencies.
The assessment identified weaknesses across Nigeria’s budget preparation and execution, public auditing and procurement transparency.
The US Department of State said Nigeria did not publish its executive budget proposal within a reasonable period.
It also noted that its budget documents failed to provide a substantially complete picture of government revenues and expenditures.
“During the review period, the government made its enacted budget and end-of-year report widely and easily accessible to the public, including online, but did not publish its executive budget proposal within a reasonable period,” the report said.
It also found discrepancies between actual revenues and expenditures and the enacted budget, raising concerns about the quality of budget implementation.
The report added that “actual revenues and expenditures did not reasonably correspond to those in the enacted budget.”
The report follows the International Monetary Fund’s 2026 Article IV consultation data showing that Nigeria had roughly N8.8 trillion (2% of GDP) in unrecorded, off-budget public spending, which the Nigerian government has formally rejected.
However, the report gave credit to Nigeria for making information on its debt obligations, including major debts of state-owned enterprises, publicly available.
According to Businness Day, the report further criticised the country’s supreme audit institution.
It said Nigeria’s audit institution did not meet international standards for independence and did not publish substantive reports, although it had access to the entire executed budget.
The findings come amid efforts by the Federal Government to strengthen revenue mobilisation, improve fiscal management and increase investor confidence as it seeks to reduce the country’s fiscal vulnerabilities.
The US assessment also raised concerns over Nigeria’s disclosure of public procurement contracts.
While the report acknowledged that Nigerian law specifies the criteria and procedures for awarding natural resource extraction contracts and licences and that the government generally follows the regulations in practice, it said accessible information on public procurement contracts was not made available to the public.
Under the US criteria, governments are expected to publish basic information on public procurement contracts.
For countries with significant natural resource extraction sectors, the criteria also require contracting and licensing procedures to be publicly available and codified in law or regulation, while basic details of awarded concessions and contracts should be disclosed.
These include the geographical area covered, the resource being developed, the duration of the contract and the company awarded the contract or licence.
Nigeria was also credited with having a sound legal framework governing its sovereign wealth fund, including disclosure of its funding source and general approach to withdrawals.
The US Department of State said the annual assessment is mandated by American law and is intended to determine whether governments receiving certain US assistance meet minimum fiscal transparency standards.
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