The World Bank has raised fresh concerns about weaknesses in Nigeria’s public finance management system, warning that persistent gaps in treasury operations, auditing, and financial reporting are undermining fiscal transparency and credibility.
The concerns were outlined in the bank’s April 2026 Nigeria Development Update titled “Nigeria’s Tomorrow Must Start Today: The Case for Early Childhood Development.” The report noted that structural and institutional shortcomings continue to hinder effective fiscal management in the country.
According to the report, Nigeria’s treasury operations remain fragmented, with thousands of government accounts not fully integrated into the consolidated revenue framework.
“Underlying these macro-fiscal challenges are persistent institutional and system weaknesses that constrain fiscal transparency, consolidation, and effective cash management,” the report stated.
It revealed that more than 5,000 sub-accounts linked to the Treasury Single Account are yet to be fully integrated into the national revenue framework. The bank also highlighted incomplete reconciliation between the Government Integrated Financial Management Information System and records from the Central Bank of Nigeria.
The World Bank said key modules of Nigeria’s financial management architecture, including those responsible for revenue tracking, assets, liabilities, and commitment controls, are not yet fully operational. This has resulted in manual adjustments, reporting delays, and inconsistencies across fiscal reports.
The report also pointed to coordination challenges among key fiscal institutions such as the Office of the Accountant-General of the Federation, the Debt Management Office, and the Budget Office of the Federation. According to the bank, the lack of seamless integration among their systems slows reporting processes and weakens the reliability of fiscal data.
Transparency in public financial reporting was another major concern raised in the report. The World Bank noted that audited financial statements of the Federal Government have not been published since 2021, while the country’s audit framework is still anchored in a law enacted in 1956 and awaiting reform.
It warned that a growing backlog of audits is limiting effective oversight of government finances. “Audit backlogs constrain oversight, weaken accountability, and limit the ability of stakeholders to assess the government’s financial performance accurately,” the report stated.
The bank said these institutional gaps weaken the credibility of Nigeria’s fiscal projections and complicate efforts to determine the country’s true financial position.
Despite these concerns, the report acknowledged recent reforms introduced by the Office of the Accountant-General of the Federation aimed at strengthening revenue collection and reducing leakages across Ministries, Departments, and Agencies.
In November 2025, the office introduced the Federal Treasury e-Receipt as the sole legally recognised payment receipt for government transactions, effective January 1, 2026. The government also rolled out the Revenue Optimisation and Assurance Platform to unify billing systems and automate revenue processes.
The platform integrates several government systems, including the Treasury Single Account, GIFMIS, the Central Bank of Nigeria, and the Federal Inland Revenue Service, enabling real-time monitoring, reconciliation, and remittance of government revenues. Officials say the initiative is designed to eliminate unauthorised deductions, improve transparency, and save billions of naira previously lost to leakages.
The World Bank noted that fiscal pressures could intensify ahead of the 2027 general elections, although higher oil revenues in 2026 may partly offset the strain.
According to the report, Nigeria’s medium-term fiscal outlook will depend largely on the success of ongoing tax and revenue reforms introduced earlier in 2026. The reforms aim to modernise tax laws, introduce a global minimum tax, streamline incentives, and strengthen tax administration.
However, the bank warned that some measures could have short-term revenue impacts. Allowing value-added tax input credits without raising the VAT rate could reduce collections initially, though the policy is expected to broaden the tax base and improve compliance over time.
The report also highlighted the role of digital tools such as VAT e-invoicing in improving transparency and reducing leakages across the tax system.
In the oil sector, policy adjustments introduced in February 2026—including the suspension of selected deductions and the move to direct cash remittances of oil revenues—are expected to boost government income by about 0.4 percent of GDP annually.
Looking ahead, the World Bank said further reforms at the state level could help improve Nigeria’s revenue performance. Even with projected improvements, the country’s revenue-to-GDP ratio is expected to reach about 10.5 percent by 2028—still far below the Sub-Saharan Africa average of 19 percent.
The bank stressed that sustained fiscal discipline and stronger institutional coordination will be critical to improving Nigeria’s public finance management and restoring investor confidence.
