REFORM TALKS with Enam Obiosio
When I first read the World Bank’s press release on Nigeria’s State Fiscal Transparency, Accountability and Sustainability (SFTAS), I felt a mixture of relief and cautious optimism. Relief because, for the first time in years, I could see a structured, evidence-based account of tangible progress in Nigeria’s fiscal governance at the state level. Cautious optimism because, while the release highlights real achievements, it also exposes the fragile nature of these gains and the work that still lies ahead. As someone who has followed Nigeria’s fiscal evolution closely, I feel compelled to reflect on what the program means for the country, for its citizens, and for the future of public accountability.
Nigeria has long struggled with opaque and unpredictable public finances. Citizens watch governments collect taxes and borrow funds, yet most of the time, they cannot see how money is spent or whether it reaches schools, hospitals, and roads. For decades, public trust in fiscal management has been weak because transparency was inconsistent, procurement processes were often informal, and patronage networks dominated resource allocation. The SFTAS Program was introduced in 2018 to confront exactly this problem. By offering performance-based grants totaling $1.5 billion, the federal government incentivized states to adopt reforms in four critical areas: fiscal transparency and accountability, domestic revenue mobilization, expenditure efficiency, and debt management and sustainability.
What struck me most about the program is its clear understanding that technical reform alone is rarely enough. The designers of SFTAS recognized that states often face political and institutional barriers to reform. Simply asking governments to be transparent or efficient would have failed. The financial incentives created a tangible reason for states to change behaviors that had been entrenched for decades. I find this approach both practical and encouraging because it shows that reform in Nigeria does not have to rely solely on abstract ideas of good governance. It can be achieved when incentives, technical support, and oversight converge.
The report documents impressive progress in transparency. By the third year of the program, all 36 states were publishing annual budgets and audited financial statements on time and in compliance with international standards. Thirty states went further, releasing quarterly budget implementation reports, and citizen engagement in budget processes expanded significantly. I cannot overstate how important this is. Transparency is not just a technical requirement. It is the foundation for accountability. When citizens, journalists, and civil society organizations can see how funds are allocated and spent, they are empowered to ask questions, identify gaps, and demand better service delivery.
Revenue mobilization is another area where I see promising results. Internally generated revenue, or IGR, increased nominally from 19.6 percent of total revenues in 2017 to 29.2 percent in 2022. Seventeen states achieved over 80 percent coverage of their revenues through Treasury Single Accounts (TSAs), twenty-nine states adopted consolidated revenue codes, and 34 states updated urban property records. These changes are technical in nature, but they carry profound implications. A state that can collect and manage its own revenue is less dependent on federal allocations, more able to plan sustainably, and better positioned to fund local services. I am particularly heartened by the fact that even after inflation eroded some of these gains, the trajectory is still upward. States are starting to treat revenue as a critical tool for governance, not just a source of discretionary spending.
The program’s impact on expenditure efficiency is equally noteworthy. Thirty-three states linked 95 percent of civil servants and pensioners to biometric and Bank Verification Number (BVN) data, dramatically reducing payroll fraud. I remember reviewing old reports where ghost workers drained millions of naira from state coffers without consequence. The fact that twenty states have maintained these systems even after SFTAS incentives ended shows that reforms can stick when they are practical, verifiable, and difficult to reverse. Procurement has also improved, with most states enacting laws aligned with international standards and eighteen implementing e-procurement systems. These reforms reduce the scope for arbitrary decision-making and ensure that public funds are spent more effectively.
Debt management is another area where I feel Nigeria has made meaningful progress. Before SFTAS, state borrowing was often opaque, poorly monitored, and occasionally reckless. Now, all but one state have enacted debt legislation, and thirty-three states submit quarterly debt reports. This reporting provides a level of predictability and oversight that was largely absent in previous decades. For me, this is a crucial step toward fiscal discipline because it allows both citizens and oversight bodies to assess borrowing decisions before they become unsustainable.
Yet the report also reminds me that transparency alone is not enough. I worry that without translating these reforms into real accountability, the progress could remain largely procedural. Transparency is a necessary condition, but not a sufficient one. Citizens need to see their taxes converted into functional schools, well-stocked hospitals, maintained roads, and other visible public services. I want to see fiscal transparency linked to outcomes that directly affect people’s lives, not just neat spreadsheets and timely reports. The next step for Nigeria is to ensure that the structures and norms established by SFTAS are consistently tied to service delivery, so the benefits of reform are tangible and widely felt.
Political resistance remains a real challenge. The report notes that reforms that disrupt entrenched patronage networks – like reducing budget deviations or sustaining procurement transparency – proved most difficult to implement. I have seen this firsthand. In many states, political actors still prioritize short-term loyalty and personal networks over institutionalized processes. This tension makes it clear that financial incentives alone cannot guarantee lasting reform. Institutionalization, civic engagement, and continued oversight are necessary to ensure that progress is not reversed once grants or programs end.
One of the aspects I admire about SFTAS is its long-term vision. The report highlights that some of the program’s most enduring impacts have been technical measures that are hard to reverse, such as biometric verification and BVN linkage for civil servants and pensioners. These reforms may seem small, but their effect on payroll integrity and public trust is enormous. I see this as a lesson for policymakers: practical, verifiable reforms that produce immediate benefits are more likely to endure than abstract policy commitments. In other words, Nigerians can believe in reform when they see it working in real time.
The World Bank statement also points toward future programs like States Action on Business Enabling Reforms (SABER) and HOPE-Gov, which aim to build on SFTAS. I welcome these initiatives, but I stress that they must go beyond technical compliance. Incentives and oversight are important, but they must be paired with clear mechanisms for citizen feedback and direct connections to service delivery outcomes. Without this, transparency risks being an end in itself rather than a means to better governance.
I also believe citizen engagement will determine whether these reforms succeed over the long term. Transparency opens a window, but engagement ensures that it is meaningful. When citizens participate in budget processes, when civil society and media hold governments accountable, reform becomes harder to reverse. SFTAS has shown that states can adopt better practices under structured programs, but true accountability arises when citizens, not just auditors, are empowered to monitor performance. This civic dimension cannot be overlooked.
At the same time, I am aware of the limitations of what SFTAS achieved. While internally generated revenue increased nominally, inflation eroded much of the real gains. Expenditure efficiency improved, but budget deviations and procurement challenges remain in some states. Debt legislation has been enacted, yet fiscal discipline is not yet ingrained across all levels of government. These gaps remind me that reform is incremental and ongoing. There are no quick fixes in a system as complex and historically opaque as Nigeria’s. Each reform, each report, each incremental improvement is a step toward a more predictable and accountable fiscal environment.
I also reflect on the broader significance of these reforms for Nigeria’s development. Fiscal transparency and accountability are not just administrative concerns; they are essential to the country’s economic and social progress. When states manage resources responsibly, they create an environment that attracts investment, strengthens service delivery, and improves citizen trust. Conversely, opaque and poorly managed finances erode confidence, discourage investment, and perpetuate inequality. I see SFTAS not merely as a fiscal program but as a foundational pillar for good governance in Nigeria.
In my view, the path forward is clear. Transparency must be consistently linked to accountability, and accountability must be measured by outcomes. States should continue to expand reforms that have proven effective, such as biometric verification, consolidated revenue codes, and Treasury Single Accounts.
