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The World Bank has raised fresh concerns over Nigeria’s public finance management system, highlighting significant gaps in treasury operations, audit processes, and financial reporting that continue to weaken fiscal transparency and accountability.
The concerns were detailed in the Bank’s April 2026 Nigeria Development Update, which underscores persistent structural inefficiencies affecting the country’s fiscal credibility and regulatory reporting systems.
Fragmented Treasury Operations and Reporting Gaps
According to the report, Nigeria’s Treasury Single Account (TSA) framework remains incomplete, with over 5,000 sub-accounts yet to be fully integrated into the consolidated revenue structure. This fragmentation continues to hinder effective cash management and limits the efficiency of compliance management systems within public finance operations.
The report further noted inconsistencies between the Government Integrated Financial Management Information System (GIFMIS) and records from the Central Bank of Nigeria, leading to reconciliation challenges, reporting delays, and reduced data accuracy.
These gaps reflect broader issues in regulatory compliance monitoring and highlight the need for more advanced compliance technology and system integration across government platforms.
Weak System Integration and Institutional Coordination
The World Bank identified major shortcomings in the functionality of key financial management modules, including revenue tracking, asset and liability management, and commitment controls. Many of these systems are either partially operational or poorly integrated, resulting in manual adjustments and inconsistencies in fiscal data.
Critical institutions such as the Office of the Accountant-General of the Federation (OAGF), the Debt Management Office (DMO), and the Budget Office of the Federation (BOF) continue to operate with limited system interoperability. This lack of coordination weakens regulatory intelligence, slows decision-making, and undermines the reliability of fiscal projections.
Transparency and Audit Backlogs
The report also flagged transparency concerns, noting that Nigeria has not published audited federal government financial statements since 2021. In addition, the audit framework remains anchored in outdated legislation dating back to 1956, limiting its effectiveness in modern financial governance.
A growing backlog of audits further constrains oversight, reducing the ability of stakeholders to conduct accurate compliance audits and assess government financial performance. These challenges weaken accountability and erode confidence in public financial management.
Implications for Fiscal Credibility
The World Bank warned that these institutional gaps are complicating efforts to determine Nigeria’s true fiscal position and undermining investor confidence. Weak internal controls, delayed reporting, and fragmented systems continue to affect the credibility of fiscal projections and hinder effective risk mitigation.
Reform Efforts and Digital Transformation
Despite these challenges, recent reforms led by the OAGF signal progress toward improving fiscal discipline and transparency. Key initiatives include the introduction of the Federal Treasury e-Receipt as the sole authorised payment receipt for government transactions and the rollout of the Revenue Optimisation and Assurance Platform.
The platform aims to unify billing systems, automate revenue processes, and integrate key infrastructure such as the TSA, GIFMIS, the Central Bank, and the Federal Inland Revenue Service (FIRS). This aligns with global trends in RegTech solutions, leveraging automation and digitalisation to strengthen regulatory compliance frameworks and improve real-time monitoring.
Officials say these reforms are designed to reduce leakages, enforce stricter compliance, and enhance transparency across Ministries, Departments, and Agencies (MDAs), ultimately improving compliance tracking and revenue accountability.
Revenue Outlook and Policy Reforms
Looking ahead, the World Bank noted that Nigeria’s fiscal outlook will depend heavily on the success of ongoing tax reforms and revenue mobilisation efforts. The new tax framework introduced in January 2026 is expected to modernise fiscal laws, strengthen administration, and improve regulatory policy implementation.
However, the Bank cautioned that some reforms—such as expanded VAT input credits—may reduce revenue in the short term, even as they aim to broaden the tax base and enhance long-term financial compliance.
Technology is expected to play a critical role in this transition, particularly through VAT e-invoicing and broader digitalisation initiatives that can improve transparency, reduce leakages, and strengthen compliance analytics.
Oil Revenue and Subnational Reforms
In the oil sector, policy adjustments such as the suspension of selected deductions and the move to direct cash remittances are projected to increase government revenue. Additionally, reforms at the subnational level—particularly around turnover taxes—could improve Nigeria’s revenue-to-GDP ratio, although it remains below regional benchmarks.
The World Bank emphasised that sustained reforms, improved institutional coordination, and enhanced adoption of compliance automation tools will be critical to strengthening Nigeria’s fiscal framework.
As the country navigates economic pressures ahead of the 2027 elections, the need for robust regulatory compliance services, transparent reporting, and efficient public finance systems will remain central to restoring investor confidence and ensuring long-term economic stability.
For more insights on financial regulation and digital compliance trends, explore related coverage on RegTech Africa’s RegTech industry and compliance technology sections.
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