ABUJA, December 12, 2025 - The World Bank today released the Fiscal Governance Reform in Nigeria: Lessons from the State Fiscal Transparency, Accountability and Sustainability Program (SFTAS), a report reviewing one of Nigeria's most significant subnational fiscal reform initiatives. The report offers an in-depth analysis of how the SFTAS Program, implemented between 2018 and 2022, strengthened fiscal transparency, accountability, and sustainability across Nigeria's 36 states.
The SFTAS Program was introduced during a period of severe fiscal stress to incentivize states to adopt reforms aligned with the Federal Government's Fiscal Sustainability Plan. Through performance-based grants totaling $1.5 billion, states were encouraged to implement measures that improved fiscal governance and reduced fiscal risks. These reforms focused on four critical areas: fiscal transparency and accountability, domestic revenue mobilization, public expenditure efficiency, and debt management and sustainability.
The report finds that the program achieved substantial progress in laying the foundations for sound fiscal governance. By the third year of implementation, all states were publishing annual budgets and audited financial statements on time and in compliance with international standards. Thirty states regularly published quarterly budget implementation reports, and citizen engagement in budget processes increased significantly. States also made strides in revenue management, with seventeen achieving over 80% Treasury Single Account coverage, twenty-nine adopting consolidated revenue codes, and thirty-four updating urban property records. Internally generated revenue rose nominally from 19.6% of total revenues in 2017 to 29.2% in 2022, although real gains were eroded by inflation.
"The SFTAS Program demonstrates that even in challenging contexts, incremental progress in fiscal governance is possible. By incentivizing transparency and accountability, states have laid the foundation for better fiscal management and service delivery. The next step is to deepen these reforms and connect them to tangible improvements in citizens' lives." said Mathew Verghis, World Bank Country Director for Nigeria.
Progress was also recorded in expenditure efficiency. Thirty-three states linked 95% of civil servants and pensioners to biometric and Bank Verification Number data, reducing payroll fraud. Nearly all states passed procurement laws aligned with international standards, and eighteen introduced e-procurement systems. In debt management, all but one state enacted debt legislation, and thirty-three states submitted quarterly debt reports, creating a framework for improved fiscal oversight. However, the report notes that reforms disrupting entrenched patronage networks-such as reducing budget deviations and sustaining procurement transparency-proved most difficult to implement and maintain. Sustainability of reforms will depend on continued incentives, institutionalization, and civil society engagement.
"SFTAS was a game-changer in making Nigeria's fiscal environment more legible and predictable. While reforms were uneven and often slow, they created new norms and tools that can be mobilized during windows of opportunity, for example, even after the program and its financial incentives ended, 20 states have continued to maintain biometric and Bank Verification Number (BVN) linkage for civil servants and pensioners-a critical reform that reduces payroll fraud and helps safeguard public funds. This achievement illustrates how targeted reforms can deliver tangible results and strengthen trust in public financial management, said Deborah Isser and Diane Zovighian, Lead Authors of the Report "The challenge now is to move from transparency to accountability and ensure reforms translate into better fiscal outcomes."
The report concludes that sustaining progress will require a combination of continued financial incentives under new programs such as States Action on Business Enabling Reforms (SABER) and HOPE-Gov, stronger institutional capacities, and enhanced citizen engagement. Future reforms should focus on linking fiscal governance improvements to service delivery outcomes in health, education, and infrastructure.
