OECD Report: Nigeria Failing to Reflect Foreign Aid in National Budgets

A new OECD report reveals that Nigeria is failing to accurately report foreign aid in its national budgets, hindering transparency and accountability in the country's development spending. According to the report, only 35% of development indicators can be accurately tracked using government data. Nigeria currently records no development cooperation flows in its national budget, limiting formal scrutiny of external resources.

This is a significant decline from 49% in 2018 and poses challenges in integrating external funding into the country's fiscal process. Only 17% of development partners provide Nigeria with medium-term spending plans, down from 22% in 2018, restricting the government's ability to plan medium-term development expenditure. Additionally, development partners' use of Nigeria's public financial management systems has fallen to 63%, down from 79% in 2018, despite improvements in some areas.

The report highlights a lack of transparency and accountability in how foreign aid is used, as only 35% of indicators could be monitored using government data. Nigeria has pledged to address these issues by recording all development cooperation flows in the national budget with quarterly breakdowns by 2027, integrating reporting into parliamentary budget sessions, and increasing the coverage of disaggregated data for vulnerable groups.

Development partners have also committed to increasing their use of Nigeria's public financial management systems and providing three-year forward-spending plans to at least 80% of partners by 2027.