Nigeria has again failed to meet the United States’ minimum fiscal transparency standards, according to a State Department report released this week, a finding analysts say could push up the country’s borrowing costs and dampen investor sentiment.
The 2026 Fiscal Transparency Report, covering the period from January to December 2025, found Nigeria made no significant progress in fixing weaknesses in its public financial management and disclosure practices, marking the second consecutive year the country has fallen short.
Of the 140 governments and entities assessed, 73 met the minimum requirements while 67, including Nigeria, did not. Fourteen of the countries that failed were nonetheless judged to have made significant progress — a group that did not include Nigeria. Regional peers Ghana, Kenya, Rwanda, South Africa and Uganda all met the standard, as did India, Indonesia, Morocco and Mauritius.
The assessment looks at whether governments publish essential fiscal data, including budget documents, debt obligations, audit reports, natural resource contracts and procurement records. This year’s report added a tougher requirement for governments to disclose terms of sovereign loans extended to other countries, including related liabilities and any collateral involved.
Analysts said repeated transparency failures could compound over time even if a single report does not immediately restrict Nigeria’s access to financing. One economist said accumulating doubts among investors — from incomplete disclosure to unexplained budget deviations and limited audit oversight — could lead markets to price Nigerian debt as higher risk.
The transparency gap could also weigh on portfolio inflows and add pressure to the naira, analysts said, since foreign investors weigh not just debt levels but the reliability of the data underpinning fiscal and external risk assessments. Concerns that public spending or financing needs are understated could push investors to demand higher returns on naira-denominated assets or pull back exposure altogether, increasing demand for foreign currency and exchange-rate volatility.
Economists in Nigeria broadly endorsed the report’s findings, calling for greater transparency in the country’s borrowing, procurement, revenue and expenditure practices as the government prepares its 2027 budget.
