A recent report by the Organisation for Economic Co-operation and Development (OECD) and the United Nations Development Programme (UNDP) has highlighted significant gaps in Nigeria's budgeting process. The report, Making Development Co-operation More Effective Progress Report 2026, found that Nigeria currently records none of its development cooperation flows on the national budget. This limits formal scrutiny of external resources and restricts the government's ability to plan development expenditure over the medium term.
The report also found that only 17 per cent of development partners provide Nigeria with forward-spending plans, down from 22 per cent in 2018. This reduction restricts the government's ability to plan development expenditure over the medium term. Furthermore, development partners' overall use of Nigeria's public financial management (PFM) systems had fallen to 63 per cent, from 79 per cent in 2018, despite improvements in some components of the system.
According to the report, the absence of development cooperation flows from the national budget represents a sharp deterioration from the 49 per cent recorded in 2018. The OECD noted that this problem is particularly significant because Nigeria has strong stakeholder engagement in the formulation of national development strategies, priorities, and results. However, external development resources are not being fully integrated into the country's formal budgeting process.
The report highlighted a gap between the predictability of funds already scheduled for disbursement and the visibility of future development financing. While 96 per cent of development assistance was disbursed predictably on an annual basis, only 17 per cent of development partners provided forward-spending plans to Nigeria. In contrast, the Nigeria country results brief recorded 100 per cent annual predictability under its specific measurement of funding scheduled to the public sector and disbursed within the same fiscal year.
The report also found a significant gap between development partners' stated alignment with Nigeria's development priorities and their use of national systems. It found that 99 per cent of development partners' project objectives were aligned with country-owned results frameworks. However, only 51 per cent of their project indicators were drawn from those national frameworks. This gap suggests that development partners need to improve their alignment with Nigeria's development priorities.
The Nigeria process was led by the federal ministry of budget and economic planning. The report was based on the 2023-2026 monitoring round of the Global Partnership for Effective Development Co-operation and included Nigeria among 44 partner-country governments covered by the exercise. The report's findings have significant implications for Nigeria's development cooperation and budgeting process.
In response to the report's findings, Nigeria has pledged to record all flows in its 2027 budget. This move aims to improve transparency and accountability in the country's development cooperation and budgeting process. The OECD and UNDP report provides a comprehensive analysis of Nigeria's development cooperation and budgeting process, highlighting areas for improvement and opportunities for reform.
Key points
- Nigeria currently records no development cooperation flows on its national budget.
- Only 17 per cent of development partners provide Nigeria with forward-spending plans.
- Nigeria has pledged to record all flows in its 2027 budget.
