The World Bank has released a report titled Fiscal Governance Reform in Nigeria: Lessons from the State Fiscal Transparency, Accountability and Sustainability Program (SFTAS), analyzing one of Nigeria’s most significant subnational fiscal reform initiatives. Implemented between 2018 and 2022, the SFTAS Program aimed to strengthen fiscal transparency, accountability, and sustainability across the country’s 36 states, particularly during a period of severe fiscal stress. Through performance-based grants totaling $1.5 billion, states were incentivized to adopt reforms aligned with the Federal Government’s Fiscal Sustainability Plan, focusing on fiscal transparency and accountability, domestic revenue mobilization, public expenditure efficiency, and debt management.
The report finds that the program achieved substantial progress in establishing the foundations for sound fiscal governance. By the third year, all states were publishing annual budgets and audited financial statements on time and in line with international standards. Thirty states regularly issued quarterly budget implementation reports, while citizen engagement in budget processes grew significantly. States also improved revenue management, with seventeen achieving over 80% Treasury Single Account coverage, twenty-nine adopting consolidated revenue codes, and thirty-four updating urban property records. Internally generated revenue increased nominally from 19.6% in 2017 to 29.2% in 2022, although inflation offset some real gains.
Expenditure efficiency also improved under SFTAS. Thirty-three states linked 95% of civil servants and pensioners to biometric and Bank Verification Number (BVN) systems, reducing payroll fraud. Most states passed procurement laws aligned with international standards, and eighteen implemented e-procurement systems. In debt management, all but one state enacted debt legislation, and thirty-three submitted quarterly debt reports, creating a framework for improved oversight. The report notes that reforms disrupting entrenched patronage networks, such as reducing budget deviations and sustaining procurement transparency, were the most challenging to implement and maintain.
The report highlights that even after the program ended, many reforms continued, demonstrating their lasting impact. Twenty states maintained biometric and BVN linkage for civil servants and pensioners, helping safeguard public funds and reduce payroll fraud. This continuity illustrates how targeted reforms can produce tangible results and build trust in public financial management. The report emphasizes the importance of moving from transparency to accountability and ensuring reforms translate into better fiscal outcomes.
Sustaining progress will require continued financial incentives through new programs such as States Action on Business Enabling Reforms (SABER) and HOPE-Gov, stronger institutional capacities, and enhanced citizen engagement. Future reforms should focus on linking fiscal governance improvements to service delivery outcomes in critical sectors like health, education, and infrastructure, ensuring that enhanced fiscal management leads to tangible benefits for citizens.
