Despite making progress, some factors still undermine Nigeria’s fiscal transparency, says a report from the United States authorities.
These factors include the late presentation of the federal budget and the opacity in the financial records of the state-owned oil company, Nigerian National Petroleum Corporation, (NNPC) budgets.
The reports came just as the oil corporation made history this month with the publication of its first audited financial statements after 43 years of its operation.
The U.S. Department of State two weeks ago presented its Fiscal Transparency Report for the year 2020.
The report describes the minimum requirements of fiscal transparency ”developed, updated, and strengthened” by the Department in consultation with other relevant federal agencies.
It reviews governments that were originally identified in a 2014 fiscal transparency report and assesses those that still did not meet the minimum fiscal transparency requirements.
Also, it indicates whether those governments made significant progress toward meeting the requirements during the review period of January 1 – December 31, 2019.
Of the 65 governments reviewed, 14, Nigeria inclusive, made significant progress toward meeting the minimum requirements of fiscal transparency.
According to the report, Nigeria made significant progress by including allocations to and earnings from its state-owned enterprises in its budget documents as against its performance in 2019.
“During the review period, the government made its executive budget proposal, enacted budget, and end-of-year report accessible to the general public, including online.
“Information on debt obligations was publicly available. Budget documents provided detailed estimates for revenues and expenditures but provided only high-level earnings and expenditures estimates from state-owned enterprises.”
More so, it acknowledged the fact that Nigeria’s ‘supreme audit institution’ completed audits of the government’s budget and made audit reports on its website.
According to the report, ”the procedures by which the national government awards contracts or licences for natural resource extraction were specified in law and regulation, and the government has appeared to follow applicable laws and regulations in practice.”
However, highlighting impediments, it stated that Nigeria’s executive budget proposal was not published within a reasonable period of time.
Noting other challenges, it added that the NNPC did not make its full audited financial reports available to the public.
“Actual revenues and expenditures varied significantly from estimated figures making budget documents unreliable,” it said.
On how Nigeria’s fiscal transparency could be improved, it recommended the publishing of its executive budget proposal ”within a reasonable period of time.”
Other recommendations include; improving the reliability of budget documents by producing and publishing a supplemental budget when actual revenues and expenditures do not correspond to those in the enacted budget; and making full audit reports for significant, large state-owned enterprises publicly available.