A new international report has revealed that Nigeria currently does not record any development cooperation or donor funding flows in its national budget, a situation experts say limits transparency, weakens oversight and makes it harder for government institutions to fully account for billions of naira in external development resources.
The finding is contained in the Making Development Co-operation More Effective Progress Report 2026, jointly published by the Organisation for Economic Co-operation and Development (OECD) and the United Nations Development Programme (UNDP).
The report paints a mixed picture of Nigeria’s development financing landscape, highlighting improvements in some areas while raising concerns about transparency, long-term planning and the integration of donor-funded projects into the country's public financial management system.
According to the assessment, none of the development cooperation flows coming into Nigeria are currently reflected in the national budget, representing a sharp decline from 2018 when about 49 per cent of such funding was captured within the country's formal budgeting framework.
The report noted that the absence of donor funds from the national budget significantly limits legislative scrutiny and public oversight of external resources, despite Nigeria’s extensive engagement with international development partners.
Researchers observed that while Nigeria has made considerable progress in involving stakeholders in the formulation of development plans and national priorities, external funding supporting those objectives is still not fully incorporated into the government’s official fiscal framework.
Another concern highlighted in the report is the lack of long-term visibility regarding future donor financing.
Although development partners generally meet their annual disbursement commitments, only a small proportion provide Nigeria with forward-spending projections that would enable government planners to better anticipate future funding levels.
The report found that only 17 per cent of development partners currently share forward-spending plans with Nigeria, down from 22 per cent recorded in 2018. This, according to the OECD and UNDP, restricts the government's ability to effectively plan development expenditure over the medium term.
Despite this challenge, annual funding predictability remains relatively strong. The report noted that 96 per cent of development assistance was disbursed as scheduled within the fiscal year, while a separate Nigeria-specific results brief recorded annual predictability at 100 per cent under its measurement framework.
The assessment also uncovered a gap between development partners’ stated commitment to Nigeria’s development priorities and the systems they use to implement and monitor projects.
While nearly all donor-funded projects were aligned with Nigeria’s national development objectives, only about half of the indicators used to measure project performance were drawn directly from the country’s own results frameworks.
Even more striking, just 35 per cent of project indicators could be tracked using data generated from government systems, suggesting that many development programmes continue to rely on parallel monitoring structures rather than strengthening Nigeria’s existing institutions.
The report further highlighted a decline in development partners’ reliance on Nigeria’s public financial management systems.
According to the OECD, the overall use of government systems for budget execution, procurement, auditing and financial reporting fell from 79 per cent in 2018 to 63 per cent in the latest monitoring cycle.
The organisation said this trend reflects a continued preference among some development partners to manage resources through separate mechanisms rather than fully utilising national systems.
However, another measurement contained in the accompanying country results brief showed some progress, indicating that 56 per cent of funding directed to Nigeria’s public sector now passes through government financial management systems, compared with 28 per cent in 2018.
In response to the identified weaknesses, the Nigerian government has outlined an ambitious reform agenda aimed at improving transparency and accountability in development financing.
One of the key commitments is to ensure that all development cooperation flows are captured in the national budget beginning with the 2027 fiscal cycle. The proposal includes quarterly reporting of donor-funded resources in line with national budgeting requirements.
Government authorities also plan to integrate development cooperation reporting into parliamentary budget discussions and publish annual reports detailing both financial flows and development outcomes.
Officials further intend to achieve full compliance with quarterly reporting requirements through the national development cooperation information management system by 2027.
The reform agenda extends beyond financial reporting. Nigeria has also pledged to improve the availability of data relating to vulnerable and underserved groups, with a target of increasing disaggregated data coverage from the current 17 per cent to 60 per cent by 2028.
Development partners, for their part, have committed to increasing their use of Nigeria’s public financial management systems to 75 per cent by 2028 and ensuring that at least 80 per cent of partners provide three-year forward-spending plans by 2027.
The report forms part of a broader global assessment covering 44 partner countries and draws contributions from governments, development agencies, civil society organisations, trade unions and private-sector stakeholders.
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