The World Bank has published a report titled "Fiscal Governance Reform in Nigeria: Lessons from the State Fiscal Transparency, Accountability and Sustainability Program (SFTAS)," which reviews fiscal reforms implemented across Nigeria’s 36 states between 2018 and 2022. The SFTAS Program was launched to encourage states to adopt reforms in line with the Federal Government’s Fiscal Sustainability Plan, particularly during a period of significant fiscal challenges.
Under SFTAS, performance-based grants totaling $1.5 billion were provided to incentivize improvements in fiscal transparency, accountability, domestic revenue mobilization, public expenditure efficiency, and debt management. The report notes that by the third year of implementation, all Nigerian states were publishing annual budgets and audited financial statements on time according to international standards. Thirty states regularly released quarterly budget implementation reports, and citizen engagement in budget processes increased.
States also improved revenue management practices: seventeen achieved over 80% Treasury Single Account coverage, twenty-nine adopted consolidated revenue codes, and thirty-four updated urban property records. Internally generated revenue increased from 19.6% of total revenues in 2017 to 29.2% in 2022; however, inflation offset some of these gains.
Mathew Verghis, World Bank Country Director for Nigeria, stated: “The SFTAS Program demonstrates that even in challenging contexts, incremental progress in fiscal governance is possible. By incentivizing transparency and accountability, states have laid the foundation for better fiscal management and service delivery. The next step is to deepen these reforms and connect them to tangible improvements in citizens’ lives.”
In terms of expenditure efficiency, thirty-three states linked most civil servants and pensioners to biometric and Bank Verification Number data to reduce payroll fraud. Nearly all states passed procurement laws aligned with international standards; eighteen introduced e-procurement systems. Debt management frameworks also improved as all but one state enacted debt legislation and thirty-three submitted quarterly debt reports.
Despite this progress, the report highlights difficulties in implementing reforms that disrupt established patronage networks—such as reducing budget deviations or sustaining procurement transparency—and notes that continued incentives and civil society engagement are necessary for sustainability.
Deborah Isser and Diane Zovighian, lead authors of the report, commented: “SFTAS was a game-changer in making Nigeria’s fiscal environment more legible and predictable. While reforms were uneven and often slow, they created new norms and tools that can be mobilized during windows of opportunity, for example, even after the program and its financial incentives ended, 20 states have continued to maintain biometric and Bank Verification Number (BVN) linkage for civil servants and pensioners—a critical reform that reduces payroll fraud and helps safeguard public funds. This achievement illustrates how targeted reforms can deliver tangible results and strengthen trust in public financial management... The challenge now is to move from transparency to accountability and ensure reforms translate into better fiscal outcomes.”
The report recommends maintaining momentum through ongoing financial incentives under programs such as States Action on Business Enabling Reforms (SABER) and HOPE-Gov while focusing future efforts on linking fiscal governance improvements directly with service delivery outcomes in sectors like health, education, and infrastructure.