The Case for a Unified National Fiscal Position in Nigeria

Nigeria’s fiscal story is often told in fragments. The federal government presents its annual budget, the Debt Management Office (DMO) tracks sub-national borrowing, and the Federation Accounts Allocation Committee (FAAC) publishes monthly disbursements to states and local governments. Each of these gives part of the picture, but none presents the whole. What Nigeria lacks is a consolidated national fiscal position that clearly shows, in one view, what the country earns, spends, and owes across all levels of government. This gap has consequences. Policymakers design strategies without a complete understanding of the nation’s resources. Investors face uncertainty when they cannot reconcile conflicting figures, and citizens struggle to trace how public money moves from Abuja to their local governments. International institutions like the World Bank and IMF have repeatedly highlighted weak coordination and incomplete reporting as a barrier to fiscal credibility. Reforms such as the federal adoption of IPSAS accounting standards and the Open Treasury portal are important steps. But they remain siloed initiatives. Until Nigeria integrates its fiscal reporting across federal, state, and local levels, the country will continue to make decisions in partial darkness, with limited transparency and weakened public trust.

Fragmented Fiscal Reporting in Nigeria

Nigeria’s fiscal reporting is shaped by a mix of legal, institutional, and structural weaknesses. At the federal level, platforms such as the Open Treasury and GIFMIS provide visibility into transactions, FAAC discloses monthly revenue allocations, and the Debt Management Office (DMO) tracks borrowing at both federal and state levels. Yet none of these mechanisms is integrated into a consolidated fiscal statement. Instead, each tier, federal, state, and local, manages its data and systems, leaving no clear source for Nigeria’s overall fiscal health. The roots of this fragmentation are structural. Multiple overlapping laws and regulations across tiers of government govern Nigeria’s tax and fiscal reporting framework. This creates duplication of responsibilities, conflicting rules, and inefficiencies in data collection. Enforcement is inconsistent, and weak institutional capacity results in gaps in compliance and reporting quality. Different government entities maintain their own fiscal databases, with little coordination or integration, further undermining transparency. Historically, the absence of coordinated regulatory oversight and communication has fueled public distrust and weakened the effectiveness of reforms. The consequences are visible. In 2023, FAAC disbursed ₦10.143 trillion to federal, state, and local governments, but no consolidated statement exists to show how those resources were spent across the federation. Despite federal support through the SFTAS programme, 10 northern states had not published their 2025 budgets at the start of the fiscal year, highlighting the persistence of transparency gaps at the subnational level. Subnational debt is also mounting: state-level debt rose from ₦7.25 trillion in 2022 to ₦10.01 trillion in 2023, with the ten most indebted states accounting for ₦2.48 trillion by Q1 2025. Between 10% and 30% of monthly FAAC allocations are now deducted at source to service debts before funds reach state treasuries, squeezing fiscal space for development. Recent reforms attempt to address these challenges. The 2025 comprehensive tax reform package aims to consolidate laws into a single, coherent framework, while digitalization initiatives, such as the Electronic Fiscal System (EFS), are designed to enable real-time data sharing and enhance monitoring across government tiers. These efforts signal progress, but they remain incomplete. Without stronger institutional capacity, unified standards, and genuine coordination across levels of government, Nigeria’s fiscal landscape will continue to produce multiple, and often conflicting, numbers for debt, revenue, and expenditure. In short, Nigeria’s fiscal reporting system does not suffer from a lack of data; it suffers from fragmentation.

The Impact of an Unconsolidated Fiscal Position

This fragmentation is not just a technical concern, it has carried real and measurable consequences in recent years. A key example is the recurrent confusion around the country’s true debt profile. In 2023, discrepancies emerged between debt figures reported by the Debt Management Office and liabilities declared at state levels, creating uncertainty for lenders and credit rating agencies. This lack of a single, consolidated account undermines Nigeria’s credibility in the international financial markets and contributes to the higher risk premiums that already inflate the cost of borrowing. It also complicates negotiations with multilateral partners who require reliable and transparent numbers before extending support. At the domestic level, fragmentation weakens the allocation of scarce resources. When federal, state, and local governments report revenue and spending independently, it creates room for duplication of projects and misaligned priorities. Recent cases highlighted by the Auditor-General’s 2023 report revealed billions of naira in unaccounted federal expenditures, a problem magnified when state accounts are layered on top without reconciliation. This fuels public distrust in government finances and feeds the perception of opacity that civil society organisations such as BudgIT have consistently flagged. The consequences are also visible in Nigeria’s revenue mobilisation. With no unified fiscal picture, the federal and state governments often design overlapping tax regimes that frustrate businesses and discourage compliance. In 2024, the Manufacturers Association of Nigeria publicly criticised the proliferation of levies across states as a drag on competitiveness, noting that inconsistent enforcement of tax rules raises operating costs. Small businesses, in particular, bear the brunt of these inefficiencies, struggling to meet contradictory requirements from different tiers of government. Inflationary pressures, currently at their highest in nearly three decades, are worsened when government borrowing is expensive and fiscal management appears uncoordinated. Without a single source of truth on revenue, debt, and spending, policymakers are left making decisions with incomplete information, while citizens continue to carry the burden of fragmented governance.

Adapting Proven Models to Nigeria’s Fiscal Framework

Other countries have executed integrated fiscal reporting reforms that show what is possible when government accounts are consolidated into a single framework. The United Kingdom’s “Whole of Government Accounts” (WGA) provides one of the clearest examples. Each year, the UK Treasury publishes audited, consolidated financial statements that cover central government, local authorities, health services, and public corporations. These reports, prepared in line with International Financial Reporting Standards (IFRS), create a single transparent view of public revenue, expenditure, assets, and liabilities. This has allowed the UK to enhance fiscal planning, strengthen accountability, and lower the cost of borrowing through improved investor confidence. Closer to home, Kenya has embarked on a similar journey. Since 2024, its National Treasury has been transitioning from a cash-based system to an accrual framework, with a three-year roadmap that includes valuing all public assets and liabilities and linking a Treasury Single Account (TSA) to its Integrated Financial Management Information System (IFMIS). The aim is to curb duplication, resolve the persistent problem of pending bills, and present a consolidated fiscal picture across national and county governments. Kenya’s plan to achieve full balance-sheet reporting by 2027 reflects a deliberate attempt to build a fiscal architecture that inspires trust, both domestically and internationally. South Africa offers another instructive model, underpinned by its Public Finance Management Act (PFMA) of 1999. The legislation establishes a strong framework for financial management and reporting across national and provincial levels, requiring regular monthly and quarterly reports. These feed into consolidated fiscal statements that align revenue and expenditure data across the country. The discipline built into South Africa’s framework has not eliminated fiscal stress altogether, but it has ensured greater transparency and more reliable information for policymakers and markets. Across OECD countries, the practice is even more standardized. Governments routinely produce consolidated accounts for the “general government” sector, which covers central, state or provincial, and local levels. By embedding comprehensive macroeconomic accounting systems into fiscal governance, these countries are able to design and evaluate policies on the basis of a full financial picture. The result is not only more effective domestic policymaking but also greater comparability across borders.

What Nigeria Should Take from These Examples

Nigeria does not need to start from scratch. The Treasury Single Account (TSA), already operational at the federal level, can be extended and integrated into a consolidated fiscal reporting system similar to Kenya’s IFMIS-TSA model. This would enable revenues and expenditures across federal, state, and local governments to feed into a single platform, producing a unified national account. The Office of the Accountant General and the Fiscal Responsibility Commission could draw from South Africa’s legislated discipline by enforcing statutory deadlines for consolidated monthly and quarterly fiscal reports across all tiers of government. These would then be aggregated into an annual national statement, audited and published in the same way the UK manages its Whole of Government Accounts. Existing digital public finance tools, such as the Integrated Personnel and Payroll Information System (IPPIS) and the Government Integrated Financial Management Information System (GIFMIS), also present an opportunity. If aligned with accrual-based accounting standards, as Kenya is moving toward, these platforms could provide visibility not only on cash flows but also on assets, liabilities, and contingent obligations. This would strengthen debt sustainability planning and address the persistent issue of arrears. Taken together, these steps would allow Nigeria to build on the reforms it already has rather than chase entirely new structures. Leveraging the TSA, IPPIS, GIFMIS, and statutory oversight bodies could create a consolidated fiscal picture that improves investor confidence, lowers borrowing costs, and delivers the “single source of truth” policymakers currently lack.

Barriers to Reform in Nigeria’s Fiscal System

Global examples show fiscal consolidation is possible, but in Nigeria, the obstacles are less technical than political and structural. The first challenge is regional tension. President Tinubu’s 2024–25 tax reform proposals, especially plans to reallocate VAT revenues based on where they are generated, sparked immediate resistance from northern governors and traditional rulers. For states reliant on population-based allocations, the reforms threatened both fiscal flows and political leverage. The pushback stalled progress in the National Assembly, showing how regional distrust blocks consolidation. Even where reform has worked federally, such as the Treasury Single Account and GIFMIS, institutional inertia persists at state level. Adoption is patchy, platforms remain fragmented, and reporting gaps keep data siloed, limiting transparency. Behind these technical issues sits informal fiscal politics. Off-budget spending, discretionary oil allocations, and patronage networks rely on opacity. Reforms that demand visibility are framed as threats to entrenched interests rather than efficiency measures. Compounding this is budget credibility. The 2025 federal budget was built on assumptions, oil at $75 per barrel, and inflation near 15% which analysts considered unrealistic. When frameworks are misaligned with economic reality, reforms linked to them appear unconvincing and quickly lose traction. Finally, the weight of these failures drives public cynicism. By mid-2024, subsidy removals and a collapsing naira triggered the “End Bad Governance” protests, the largest since #EndSARS. Labor unions staged a nationwide strike, winning a wage increase but deepening distrust. In this context, fiscal transparency is not just technical but political. Without public confidence, reform has little room to breathe.

Building the Architecture of Fiscal Unity

If reform is to move beyond rhetoric, Nigeria must frame fiscal consolidation as both a technical fix and a political negotiation. The country does not lack tools; it lacks alignment on how to use them. The first step is to strengthen institutions and legal frameworks. Laws such as the Fiscal Responsibility Act, Tax Administration Act, and Public Procurement Act already exist, but weak enforcement has dulled their impact. Empowering the newly established Joint Revenue Board to harmonize tax administration across federal, state, and local governments would help reduce duplication and conflicting practices. Once these legal guardrails are in place, technology can do the heavy lifting. Here, the expansion of integrated financial management systems becomes crucial. Platforms like the Treasury Single Account, GIFMIS, and the Integrated Payroll and Personnel Information System (IPPIS) already show proof of concept at the federal level. Extending them to states and local governments would not only unify reporting but also create a digital foundation for real-time data sharing. With better platforms in place, the next challenge is ensuring that everyone speaks the same fiscal language. That means standardizing accounting and reporting practices. Full adoption of accrual-based accounting under International Public Sector Accounting Standards (IPSAS) would allow consolidated statements that are credible across tiers of government. A Fiscal Data Council, modeled on South Africa’s Parliamentary Budget Office, could anchor this process by serving as a single source of truth for fiscal data. But standards alone are not enough without people who can apply them. This is why capacity building and digital adoption must run in parallel. Training fiscal officers, rolling out e-invoicing and e-payments, and promoting data sharing between agencies would close skill gaps while improving compliance and accuracy. With systems working and skills in place, reform must also win public legitimacy. Here, transparency and accountability become the bridge. Open data portals, regular consolidated reports, and independent verification would not only strengthen oversight but also reassure citizens that reforms serve the public interest. The final piece is sequencing. Reform cannot succeed if it is all-at-once. A phased approach, starting with debt data harmonization, then moving to revenue allocation and broader fiscal integration, offers a more realistic path. Early wins could be channeled into citizen-facing programs, linking technical reforms to visible welfare improvements and sustaining political momentum.

Conclusion

Nigeria’s fiscal troubles are not new, and they are not unique. What makes them costly is how long they have been left unresolved. Other countries in similar positions made progress once they treated fiscal coherence as the starting point for reform, not the last piece of the puzzle. For Nigeria, the issue is no longer about ideas; we already have laws, agencies, and digital systems in place. The real gap is in connecting them and enforcing them across all levels of government. Until that happens, the numbers will never add up to a credible national picture. Nigeria has established the scaffolding for fiscal coherence, including laws, platforms, and agencies. What it lacks is the alignment to connect them. The question now is whether political leaders will prioritize coherence and credibility, or continue to govern in fragmented ways.