Economists have backed the United States’ assessment that Nigeria failed to meet minimum fiscal transparency requirements, warning that weak budget implementation, poor disclosure of public finances and inadequate audit practices could undermine investor confidence and the country’s economic prospects.

The experts’ reaction followed the 2026 Fiscal Transparency Report of the US Department of State, which placed Nigeria among 67 governments that failed to meet the minimum requirements and said the country made no significant progress in addressing identified deficiencies during the review period.

The country failed to meet the United States’ minimum fiscal transparency requirements and made no significant progress towards addressing the identified deficiencies, according to the 2026 Fiscal Transparency Report of the US Department of State.

The report, which was published August 11 and seen by The PUNCH on Wednesday, assessed governments over the review period of January 1 to December 31, 2025, placed Nigeria among 67 governments that did not meet the minimum fiscal transparency requirements out of 140 governments and entities, including the Palestinian Authority, as assessed by the United States.

Of the 67 governments that failed to meet the requirements, 14 were adjudged to have made significant progress towards addressing their deficiencies, while Nigeria was listed among those that made no significant progress.

The US assessment identified several shortcomings in Nigeria’s public financial management and disclosure practices, including the failure to publish the executive budget proposal within a reasonable period, deficiencies in the completeness of budget information, discrepancies between actual revenues and expenditures and the enacted budget, inadequate independence of the supreme audit institution and the failure to publish accessible information on public procurement contracts.

According to the report, “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.”

It, however, noted that the government had made information on debt obligations, including major state-owned enterprise debt, publicly available.

However, the report said Nigeria’s 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 assessment also raised concerns about budget implementation, stating that “Actual revenues and expenditures did not reasonably correspond to those in the enacted budget.”

On public auditing, the US Department of State said Nigeria’s supreme audit institution did not meet international standards of independence and did not publish substantive reports, although it had access to the entire executed budget.

The report further found that Nigeria had a sound legal framework governing its sovereign wealth fund and disclosed its source of funding and general approach to withdrawals.

It also gave Nigeria credit for having laws specifying the criteria and procedures for awarding natural resource extraction contracts and licences, adding that the government followed the existing regulations in practice.

However, it said the country failed to make information on public procurement contracts accessible to the public.

The US assessment is part of an annual review mandated by American law to determine whether governments receiving certain US assistance meet minimum fiscal transparency requirements.

The Department of State said the exercise was designed to promote public access to information on government revenues, expenditures, debt obligations, natural resource contracts and public procurement, while strengthening accountability and public participation in budgeting.

It explained that fiscal transparency was important because it “helps build market confidence, and underpins economic sustainability.”

The department added that transparency provided citizens with information needed to scrutinise government spending and participate meaningfully in public debate.

“Fiscal transparency is a critical element of effective public financial management, helps build market confidence, and underpins economic sustainability,” the report stated.

The United States said its assessment did not amount to a corruption rating, stressing that failure to meet the minimum fiscal transparency requirements did not necessarily mean that a government was significantly corrupt.

It stated, “While a lack of fiscal transparency can be an enabling factor for corruption, the report does not assess corruption.

“A finding that a government ‘does not meet the minimum fiscal transparency requirements’ does not necessarily mean there is significant corruption in the government.”

It equally noted that meeting the requirements did not necessarily indicate a low level of corruption.

For Nigeria, the report emphasised that the supreme audit institution did not meet international standards of independence and did not publish substantive reports, despite having access to the entire executed budget.

Procurement transparency flagged

The report also examined transparency in public procurement and natural resource contracting. While Nigeria was credited with specifying in law the criteria and procedures for awarding natural resource extraction contracts and licences and for following existing regulations in practice, the US assessment found that accessible information on public procurement contracts was not published.

The US criteria state that basic information on public procurement contracts should be publicly available.

For countries with significant natural resource extraction sectors, the criteria require contracting and licensing procedures to be publicly available and codified in law or regulation.

Basic parameters of concessions and contracts should also be made public after decisions are taken, including the geographical area covered, the resource being developed, the duration of the contract and the company awarded the contract or licence.

Economists react

Economists backed the United States’ assessment that Nigeria has failed to meet minimum fiscal transparency requirements. They affirmed that the continued rollover of budgets, weak disclosure of actual spending and poor audit practices undermine confidence in the economy.

The economists, who spoke separately in a phone interview with The PUNCH, said the findings contained in the 2026 Fiscal Transparency Report of the US Department of State reflected longstanding weaknesses in Nigeria’s public financial management.

Director of the Lagos Business School Public Sector Initiative, Prof Franklin Ngwu, said the report reflected problems that Nigerians had repeatedly raised about the country’s budget and financial management.

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