What Nigeria can learn from global best practices on fiscal transparency

BY MUHAMMAD AHMAD ILIYASU

Nigeria’s governance and fiscal challenges are undermined by persistent corruption, inefficiencies in public finance, and a lack of transparency, which have stymied economic progress, among others. According to the 2024 Mo Ibrahim Index on African Governance, Nigeria ranked 33rd out of 53 African nations with a score of 45.7 out of 100, Nigeria has shown a -1.4 decline in its governance score between 2014 and 2023.

This ranking is further highlighted by low scores across critical categories such as Security & Rule of Law (39.7), Participation, Rights & Inclusion (47.9), Foundations for Economic Opportunity (48.6), and Human Development (46.4). While these challenges are significant, examples from around the world highlight the transformative potential of fiscal transparency and public integrity when backed by robust institutions and data-driven strategies. By examining how other countries have achieved success in these areas, Nigeria can identify actionable solutions to address its governance deficits.

One of the most striking examples of fiscal transparency comes from Estonia, which has emerged as a global leader in e-government. Estonia digitized its public financial management systems and introduced blockchain technology to track public procurement and spending. These innovations have led to a 30% increase in administrative efficiency and a 25% reduction in corruption opportunities, according to the World Bank.

In comparison, Nigeria’s procurement processes remain largely opaque, with corruption scandals frequently involving inflated contracts and misappropriation of public funds. By 2023, procurement-related corruption cost Nigeria an estimated 30% of its annual budget. Estonia’s success demonstrates that technology, when applied systematically, can be a game-changer in ensuring fiscal accountability.

Participatory budgeting, pioneered in Porto Alegre, Brazil, is another area where Nigeria could draw lessons. By involving citizens directly in decisions about local government budgets, Porto Alegre has increased investment in essential services like healthcare and education by 20%, with a particular focus on underserved communities. This participatory approach has not only improved public service delivery but also strengthened trust in government institutions.

In Nigeria, public participation in budgeting remains minimal, with the process often limited to elite stakeholders. A 2021 report by BudgIT revealed that over 70% of Nigerians feel disconnected from how public funds are allocated. A more citizen-centric budgeting process would bridge this gap, fostering trust and ensuring that budgetary decisions reflect public priorities.

Anti-corruption frameworks in countries like Singapore and Botswana highlight the importance of institutional independence and efficiency. Singapore’s Corrupt Practices Investigation Bureau (CPIB), established in 1952, operates independently of other government agencies and has been instrumental in reducing corruption to negligible levels. This success is reflected in Singapore’s top-tier ranking on Transparency International’s Corruption Perceptions Index (CPI), where it scored 85 out of 100 in 2023.

In contrast, Nigeria scored 24 out of 100, ranking 150th out of 180 countries. The difference lies not only in institutional strength but also in the enforcement of laws. While Nigeria’s Economic and Financial Crimes Commission (EFCC) has made progress, its efforts are often undermined by political interference, insufficient resources, and inconsistent prosecution of high-profile cases.

Fiscal discipline is another area where Nigeria lags behind global standards. Sweden and Germany, for instance, have adopted fiscal rules that ensure economic stability. Sweden’s balanced budget rule requires government expenditures not to exceed revenues over an economic cycle, while Germany’s “debt brake” caps structural deficits at 0.35% of GDP.

These policies have allowed both nations to maintain sustainable debt levels—38% and 60% of GDP, respectively, as of 2022. In contrast, Nigeria’s public debt has risen sharply, reaching 40% of GDP in 2023, with debt servicing consuming over 80% of government revenues. Without strict fiscal rules, Nigeria risks entering a debt trap that could hinder long-term economic growth.

Open data initiatives also illustrate the potential for transparency. The United Kingdom’s Open Data Portal provides public access to over 40,000 datasets on government operations, enabling citizens and civil society to monitor public spending effectively. This transparency has contributed to a 15% increase in public trust in government institutions, as reported in a 2020 World Bank study.

Meanwhile, Nigeria’s efforts at transparency, such as the Nigeria Open Contracting Portal (NOCOPO), have yet to achieve comparable results. A lack of comprehensive data and limited public awareness have restricted its impact, with Transparency International noting that only 10% of procurement data is consistently published.

In this context, the Center for Fiscal Transparency and Public Integrity (CeFTIP) is playing a crucial role in Nigeria’s quest for better governance. Through its annual Transparency and Integrity Index, CeFTIP evaluates government ministries, departments, and agencies (MDAs) on their adherence to transparency and accountability standards.

Its reports reveal systemic gaps in compliance with fiscal transparency norms and offer recommendations to bridge these gaps. Additionally, CeFTIP organizes sensitization campaigns to raise awareness about the importance of fiscal openness, while its capacity-building programs train public officials on best practices in financial management and anti-corruption measures. These efforts are vital in building the foundational infrastructure for a culture of accountability in Nigeria.

Whistleblower protection is another area where Nigeria falls short. In New Zealand and Canada, robust legal frameworks safeguard whistleblowers from retaliation, resulting in a significant increase in reported cases of corruption and misconduct. According to the International Whistleblower Protection Network, countries with effective protections detect 30% more corruption cases. In Nigeria, the whistleblower policy introduced in 2016 initially led to the recovery of over $500 million but has since stagnated due to weak legal protections and a lack of institutional support.

South Africa offers valuable lessons in civil society collaboration. Organizations such as the Public Service Accountability Monitor (PSAM) have successfully partnered with government entities to track public spending, resulting in a 25% improvement in service delivery outcomes, according to the World Bank. In Nigeria, civil society organizations like CeFTIP, BudgIT and Connected Development have made strides in promoting accountability but often face resistance from government agencies. Strengthening these partnerships could amplify their impact and ensure more transparent governance.

Recommendations

For Nigeria to replicate these successes, it must prioritize institutional reforms like DOGE and adopt data-driven strategies tailored to its context. Establishing a robust digital public finance system, akin to Estonia’s would enhance transparency and reduce corruption. Adopting participatory budgeting processes, starting at the local government level, would empower citizens and align public spending with community needs. Strengthening anti-corruption agencies through legal and financial autonomy is essential to combating high-level corruption.

Moreover, Nigeria should introduce enforceable fiscal rules to curb excessive borrowing and ensure sustainable debt levels. Expanding open data initiatives and increasing public awareness of platforms like NOCOPO would improve oversight and citizen engagement. Supporting the activities of organizations like CeFTIP through increased funding, open access and government collaboration could scale their impact on promoting transparency. Finally, enacting comprehensive whistleblower protection laws and fostering partnerships with civil society organizations would create a more inclusive and accountable governance framework.

By learning from the progress made in countries like Estonia, Singapore, and Brazil, and by leveraging the ongoing efforts of organizations like CeFTIP, Nigeria can chart a path toward fiscal transparency and public integrity. These reforms, while challenging, are crucial for restoring public trust, attracting investment, and ensuring a prosperous future for all Nigerians.