Executive Snapshot
Core Diagnosis
Nigeria suffers from a results gap, a persistent disconnect between rising public expenditure and actual improvements in citizen welfare. The problem is institutional rather than fiscal. Budgeting remains input-driven, legislative oversight focuses on appropriations rather than outcomes, ministries are rewarded for spending rather than performance, and audit systems emphasise financial compliance rather than value for money. As a result, the public-finance system can track where money goes but cannot reliably determine what public value it creates.
Central Argument
Nigeria’s public-finance challenge is no longer primarily about budget transparency or expenditure levels, but about the absence of a results-accountability system that links public spending to measurable improvements in service delivery. While reforms such as the Treasury Single Account (TSA), GIFMIS, and procurement disclosure have improved fiscal visibility, they have not ensured that increased spending translates into better health, education, infrastructure, or security outcomes.
Governance Implications
The governance consequence is a gradual erosion of state legitimacy. As fiscal pressures increase and citizens experience worsening service delivery despite higher public spending, transparency alone becomes insufficient as a source of accountability. Without institutional mechanisms that connect expenditure to outcomes, government risks sustaining a system that rewards budget execution while tolerating performance failure. This Policy Pulse therefore frames results accountability as a governance reform imperative rather than a technical public-finance adjustment.
Key Data Points
a) Nigeria’s 2026 Federal Budget stands at approximately ₦68.32 trillion.
b) Debt-service costs consumed 41.6% of federally retained revenue in 2025.
c) Headline inflation averaged 26.7% in 2024, with food inflation exceeding 30%.
d) Between 2024 and 2026, governments allocated approximately:
i. ₦5.9 trillion to health
ii. ₦7.4 trillion to education
iii. Over ₦10 trillion to infrastructure
iv. ₦5.8 trillion to defence and security
e) Nigeria’s doctor-to-population ratio deteriorated to roughly 1:5,000, compared to the WHO benchmark of 1:600.
f) Learning poverty increased from 64% in 2018 to approximately 72% in 2023, meaning most children cannot read and understand a simple text by age ten.
g) Transport and logistics costs account for approximately 35% of product value, compared to 15–20% in peer African economies.
h) Defence and security spending increased by more than 60% between 2019 and 2024, yet insecurity and displacement remain high.
Reform Watchpoints
– Shift from transparency to performance accountability. Future reforms should focus on outcomes rather than spending visibility alone.
– Institutional integration of financial and service-delivery data. Linking GIFMIS with NHMIS, EMIS, and other sectoral databases is critical to tracking whether expenditure produces results.
– Outcome-based budgeting. Budget allocations should be tied to measurable Key Performance Indicators (KPIs) and service-delivery targets.
– Performance-informed appropriations. National Assembly oversight should incorporate evidence of previous programme outcomes before approving new expenditures.
– Expansion of value-for-money audits. The Auditor-General’s office should move beyond compliance auditing toward systematic performance auditing.
– Political economy resistance. Reform efforts will likely face resistance from actors who benefit from expenditure-focused accountability systems and symbolic project delivery.
– 2027–2029 MTEF as a decision point. Whether Nigeria embeds performance metrics into budgeting, appropriations, and audits during the next medium-term expenditure cycle will determine whether public finance becomes a tool for service delivery or remains primarily a mechanism for expenditure management.
Strategic Context
Beyond Transparency: Building Results Accountability in Nigeria’s Public Finance Systems
Nigeria’s public finance system has entered a period of acute stress in which traditional indicators of fiscal effort no longer command public legitimacy. The 2026 Federal Budget, valued at ₦68.32 trillion, is being implemented under tightening fiscal space, elevated debt-service obligations, persistent inflationary pressure, and heightened citizen scrutiny of government performance. Debt-service costs alone absorbed approximately 41.6 per cent of federally retained revenue in the 2025 fiscal year, constraining discretionary expenditure and amplifying demands that public spending demonstrate tangible public value.
Macroeconomic conditions further sharpen this pressure. Headline inflation averaged 26.7 per cent in 2024, with food inflation consistently exceeding 30 per cent, eroding real household incomes and increasing the visibility of state failure in basic service delivery. Exchange-rate volatility has simultaneously raised the naira cost of capital imports, road construction materials, medical equipment, and educational inputs, further intensifying public expectations that scarce fiscal resources be translated into measurable outcomes.
Yet Nigeria’s fiscal response has largely followed a familiar pattern: rising nominal allocations across priority sectors without commensurate improvement in service delivery indicators. Federal and state governments collectively allocated more than ₦5.9 trillion to health, ₦7.4 trillion to education, over ₦10 trillion to infrastructure, and approximately ₦5.8 trillion to defence and security across the 2024–2026 Medium-Term Expenditure Framework (MTEF). These figures signal political prioritisation, but they have not consistently produced improved healthcare access, learning outcomes, transport efficiency, or security conditions.
This divergence has shifted Nigeria’s core governance question. The challenge is no longer whether government is spending, but whether public spending produces verifiable, sustained public value. In this context, reforms centred on expenditure transparency, budget publication, procurement disclosure, and cash-management discipline, have reached their analytical and political limits. What Nigeria now confronts is the absence of results accountability: a system in which public institutions are judged not by how much they spend, but by what they deliver.
Diagnosing Institutional Failure
Transparency Without Results: Fiscal Visibility Has Not Improved Public Services
Over the past two decades, Nigeria has made substantial progress in fiscal visibility. The Budget Office of the Federation publishes annual budget proposals and implementation reports; the Bureau of Public Procurement discloses contract awards; and the Office of the Accountant-General of the Federation operates the Treasury Single Account (TSA) and the Government Integrated Financial Management Information System (GIFMIS) to track releases and payments. These reforms have reduced leakages, improved cash management and strengthened aggregate fiscal control. However, they primarily enforce procedural compliance rather than service-delivery performance. GIFMIS records financial transactions but cannot determine whether a completed health facility is staffed, a constructed road remains motorable or increased education spending improves literacy.
The consequences are visible across sectors. In health, increased expenditure has not reversed workforce shortages or improved primary healthcare functionality. Nigeria’s doctor-to-population ratio deteriorated to approximately 1:5,000 by 2022, while many Primary Health Centres recorded as completed reportedly lack essential drugs, equipment or personnel.⁶ These deficiencies reflect failures in deployment, maintenance and accountability rather than capital scarcity.
In education, World Bank diagnostics indicate that learning poverty increased from 64 per cent in 2018 to approximately 72 per cent by 2023, despite sustained expenditure growth and expanded interventions in school construction, instructional materials and teacher training. Most Nigerian children therefore remain unable to read and understand a simple text by age ten.
Infrastructure outcomes reveal a similar disconnect. Transport and logistics costs account for approximately 35 per cent of product value, compared with 15–20 per cent in peer African economies. Poor road maintenance, fragmented projects and weak performance monitoring continue despite rising capital allocations. Security expenditure also increased by more than 60 per cent between 2019 and 2024, yet conflict-related fatalities and displacement remain elevated, particularly in the North-East and North-West.
Transparency reforms have therefore plateaued. Without enforceable links between expenditure and outcomes, fiscal visibility becomes a record of spending rather than a mechanism for accountability. Nigeria’s results gap is consequently institutional rather than merely fiscal.
Where Accountability Breaks Down
Nigeria’s results deficit is best understood as a failure across the entire public-finance accountability chain.
Budget Design Rewards Inputs: At the budget-design stage, the Budget Office of the Federation prepares Medium-Term Expenditure Frameworks and annual budgets that remain largely input-driven. Although programme-based budgeting has been formally adopted, most programmes lack clearly defined and measurable service-delivery targets. Outcome indicators, where present, are often aspirational rather than operational and are weakly integrated into expenditure ceilings.
Legislative Oversight Prioritises Appropriation Over Performance: During legislative appropriation, the National Assembly exercises constitutional authority over budget approval but devotes limited attention to ex-post performance. Sectoral committees prioritise constituency projects and political visibility over systematic assessments of whether previous expenditure achieved its stated objectives. Consequently, no institutionalised mechanism connects future appropriations to past results.
Implementation Rewards Spending Rather Than Delivery: At the implementation stage, ministries, departments and agencies, including the Federal Ministries of Health, Education and Works, are incentivised to exhaust their budgets rather than achieve functional outcomes. Project success is frequently measured by fund utilisation and physical completion instead of operational functionality or service impact.
Fragmented Information Systems Obscure Results: This weakness is reinforced by fragmented financial and performance systems. GIFMIS and the Treasury Single Account effectively track releases, payments and balances but operate independently of sector-specific platforms such as the National Health Management Information System and the Education Management Information System. Consequently, a hospital may be fully paid for and recorded as completed in GIFMIS while remaining understaffed or non-functional. Similarly, a school may be commissioned without producing measurable improvements in learning outcomes. Without system integration, policymakers and citizens cannot trace the relationship between expenditure and impact.
Auditing Compliance Rather Than Performance: Audit and reporting mechanisms further weaken accountability. The Office of the Auditor-General for the Federation remains focused primarily on financial compliance and regularity audits. Performance and value-for-money audits are rare, under-resourced and seldom influence subsequent budget decisions. The separation of financial, monitoring and service-delivery data also prevents audits from informing budgets and appropriations, weakening institutional learning.
Weak Enforcement Sustains Underperformance: Finally, oversight and enforcement remain inadequate. Institutions such as the Fiscal Responsibility Commission possess statutory mandates but lack the enforcement powers and political support required to impose consequences for underperformance. The cumulative result is a fragmented system that records expenditure, rewards budget execution and tolerates outcome failure, reducing accountability to a largely procedural exercise.
Political Economy
Why Non-Performance Persists
Weak results accountability persists because it aligns with prevailing political and bureaucratic incentives. Members of the National Assembly derive political returns from visible constituency projects rather than long-term service-delivery outcomes. MDAs are evaluated on budget-utilisation rates, incentivising rapid spending over effective implementation. The executive benefits from project launches and commissioning ceremonies that generate political signalling regardless of operational sustainability.
Results-based systems threaten these incentives by introducing measurable benchmarks and potential consequences for underperformance. Resistance to such systems is therefore rational within existing political structures. Reform must confront these incentives directly rather than assume technocratic neutrality.
International Evidence
Comparative Lessons: What Transfers to Nigeria?
International experience demonstrates that results accountability is institutionally achievable when responsibility, measurement, and enforcement are aligned. Rwanda’s Imihigo performance-contract system links ministerial and local-government performance to annual scorecards evaluated publicly by the Office of the Prime Minister of Rwanda. Ghana’s programme-based budgeting reforms integrate expenditure planning with defined policy outcomes under the leadership of the Ministry of Finance of Ghana, supported by a revised chart of accounts and programme classification framework. Kenya’s devolved governance framework illustrates that decentralisation alone does not guarantee accountability without strong monitoring institutions.
However, these cases also illustrate limits. Rwanda’s system operates within a highly centralised executive structure that does not replicate Nigeria’s federal context. Ghana’s reforms face enforcement challenges due to parliamentary capacity constraints similar to those in Nigeria. The transferable lesson is therefore not institutional mimicry, but institutional clarity.
Reform Agenda
Building Results Accountability
Transitioning from framework to function requires anchoring responsibility within existing institutions. Reform leadership should be shared between the Budget Office of the Federation and the Federal Ministry of Budget and Economic Planning, with audit reinforcement from the Office of the Auditor-General and oversight by National Assembly committees.
A corrected, outcome-linked KPI framework, tied explicitly to budget ceilings and release conditions, illustrates how this shift can be operationalised:
|
Sector |
KPI |
Baseline |
Target |
Data Source |
|
Health |
% of PHCs fully functional |
38% (NPHCDA, 2023) |
65% by 2028 |
NHMIS |
|
Education |
Primary 3 literacy rate |
28% (NBS, 2023) |
50% by 2028 |
NBS / UBEC |
|
Infrastructure |
% of federal roads motorable |
54% (FERMA, 2022) |
75% by 2029 |
FERMA |
|
Agriculture |
Average maize yield (t/ha) |
1.6 (FMARD, 2023) |
2.5 by 2028 |
FMARD |
|
Security |
Average emergency response time |
47 mins (ACLED proxy, 2023) |
<25 mins by 2027 |
NPF / ONSA |
Managing Reform Risks
|
Reform |
Risk |
Mitigation |
|
KPI enforcement |
Data manipulation |
Independent NBS validation |
|
Conditional appropriations |
Political misuse |
Statutory criteria and public disclosure |
|
System integration |
Capacity gaps |
Phased rollout and technical assistance |
|
Performance pressure |
Perverse incentives |
Balanced scorecards and audits |
Recommendations
Policy Pathways
First, there should be a presidential directive mandating that the Budget Office of the Federation to publish a results annex alongside the annual Appropriation Bill, linking programme allocations to outcome indicators drawn from NHMIS, EMIS, and NBS datasets.
Second, the National Assembly should require ex-post performance briefs from MDAs as a condition for approving new capital projects within the MTEF cycle.
Third, the Office of the Auditor-General for the Federation should expand value-for-money audits and formally integrate their findings into budget-preparation guidelines.
Finally, GIFMIS should be upgraded to interface directly with sectoral outcome systems, transforming it from a transaction ledger into a results-accountability platform.
Conclusion
Making Public Spending Count
Nigeria’s governance challenge is no longer conceptual. By the 2027–2029 MTEF cycle, the Budget Office of the Federation must decide whether GIFMIS remains a transaction ledger or becomes the backbone of a results-based state. Embedding performance data into budget design, appropriation, and audit is not a rhetorical choice but an institutional one.
If this transition is made now, Nigeria can begin converting fiscal effort into public value. If not, rising expenditure will continue to coexist with declining public trust, and transparency gains will remain administratively impressive but socially hollow.
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