Nigeria has failed the minimum fiscal transparency requirements for the second consecutive year, with the U.S Department of State announcing the country made no important progress in improving its financial management and opening up its public finances in 2025.
In its 2026 Fiscal Transparency Report released Tuesday, the department assessed 139 governments and the Palestinian Authority, with only 73 meeting the minimum standards
It classified Nigeria among 67 governments that did not meet the minimum fiscal transparency requirements.
According to the US department of state, its assessment examines whether governments make key fiscal information available to the public, including budget documents, debt obligations, audit reports, natural resource contracts and public procurement information.
“Fiscal transparency is a critical element of effective public financial management, helps build market confidence, and underpins economic sustainability,” the department said.
The report also said transparency “fosters greater government accountability by providing a window into government budgets, helping citizens hold their leadership accountable and facilitating better public debate”.
According to the US, the assessment also supports business environments by strengthening public financial management and reducing the risks of corruption and unfair practices in international markets.
The report said fiscal transparency also helps to “advance internationally recognized industry standards for extractive industries to improve market access” and reduce risks associated with financial crimes such as money laundering and terrorist financing.
It said the assessment requires governments to make their executive budget proposals, enacted budgets and end-of-year reports widely and easily accessible within specified periods.
“Budget documents, including the executive budget proposal, enacted budget, and end-of-year report, should be widely and easily accessible to the public,” the report said.
The US also requires governments to make information on debt obligations publicly available, including debt linked to major state-owned enterprises.
“Information on government debt obligations, including from state-owned enterprises, should also be publicly available on a public-facing website and updated at least annually,” the report added.
The assessment further considers whether budget documents provide a substantially complete picture of planned government revenue and expenditure.
“Publicly available budget documents should provide a substantially full picture of a government’s planned expenditures and revenue, including natural resource revenues,” the US said.
The report said such documents should include expenditure broken down by ministry and revenue broken down by source and type, as well as allocations to and earnings from state-owned enterprises.
“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.
“Actual revenues and expenditures did not reasonably correspond to those in the enacted budget,” the report said.
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.
The report further criticised the country’s supreme audit institution, saying it 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.
Procurement transparency rated low
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.
Transparency seen as key to investor confidence
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.
The exercise assesses public access to information on government revenues, expenditures, debt obligations, natural resource contracts and public procurement.
The department said fiscal transparency is critical to effective public financial management, market confidence and economic sustainability.
“Fiscal transparency is a critical element of effective public financial management, helps build market confidence, and underpins economic sustainability,” the report stated.
It said greater transparency also gives citizens the information required to scrutinise government spending and participate meaningfully in public debate.
The US stressed, however, that the assessment should not be interpreted as a corruption ranking.
“While a lack of fiscal transparency can be an enabling factor for corruption, the report does not assess corruption,” it said.
A failure to meet the minimum fiscal transparency requirements, it added, “does not necessarily mean there is significant corruption in the government.”
Likewise, meeting the requirements does not necessarily indicate a low level of corruption.
Ghana, Kenya pass assessment
Among the countries that met the minimum fiscal transparency requirements were Ghana, Kenya, Rwanda, South Africa and Uganda, alongside India, Indonesia, Morocco and Mauritius.
The Department of State noted that countries’ assessments could change from one year to another as the US updates and strengthens its transparency requirements, or as governments improve or weaken their public financial management practices.
The 2026 assessment introduced a strengthened requirement that governments make the terms and conditions of sovereign loans to foreign borrowers publicly accessible, including information on liabilities and collateralised assets.
The review drew on information obtained from US embassies and consulates, other US government agencies, international organisations and civil society groups.
