Project – Public Expenditure Transparency and Budget Performance under the 2026 Federal Budget: Evidence from Selected MDAs in Abuja.

CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

Public expenditure is a fundamental instrument through which governments allocate financial resources to achieve economic growth, social welfare, infrastructure development, and effective public service delivery. The efficiency of public expenditure depends not only on the amount appropriated but also on the transparency and accountability that guide its utilization. Consequently, public expenditure transparency has become a central principle of modern public financial management (PFM), promoting openness in budgeting, expenditure reporting, procurement, and fiscal accountability (IMF, 2019).

Globally, governments have increasingly embraced fiscal transparency as a strategy for strengthening governance and improving budget outcomes. According to the Organisation for Economic Co-operation and Development (OECD, 2023), transparent budgeting enables citizens and oversight institutions to monitor government spending, reduces opportunities for corruption, improves public confidence, and enhances the effectiveness of fiscal policy. Similarly, the International Budget Partnership (IBP, 2023) maintains that countries with higher levels of budget openness consistently demonstrate stronger expenditure efficiency and improved accountability during budget implementation.

In developing economies, particularly Nigeria, fiscal transparency has become increasingly important because of persistent concerns regarding budget credibility, inefficient expenditure management, revenue constraints, and project implementation failures. The World Bank (2022) observes that Nigeria has undertaken several public financial management reforms, including the Treasury Single Account (TSA), Government Integrated Financial Management Information System (GIFMIS), Integrated Personnel and Payroll Information System (IPPIS), and the adoption of International Public Sector Accounting Standards (IPSAS), all aimed at strengthening expenditure control and enhancing accountability across public institutions.

The 2026 Federal Budget, officially titled the Budget of Consolidation, Renewed Resilience and Shared Prosperity, represents one of Nigeria’s largest fiscal appropriations, with proposed expenditure of approximately ₦58.18 trillion at presentation and subsequent legislative expansion during appropriation. The budget prioritizes infrastructure development, security, education, healthcare, agriculture, institutional reforms, and economic diversification, while emphasizing prudent expenditure management and improved monitoring of Ministries, Departments, and Agencies (Budget Office of the Federation, 2026; PLAC, 2026).

Ministries, Departments, and Agencies (MDAs) occupy a strategic position within Nigeria’s budgeting framework because they serve as the principal implementing institutions responsible for executing federal programmes and projects. Located predominantly in Abuja, these MDAs prepare annual budget estimates, receive appropriated funds, implement government policies, undertake procurement activities, and submit financial reports for legislative and audit review. Their operational efficiency therefore significantly determines the success or failure of federal budget implementation (Federal Ministry of Finance, 2026).

1.2 Statement of the Problem

Nigeria has implemented numerous public financial management reforms aimed at improving fiscal discipline, accountability, and transparency in the utilization of public resources. Despite these reforms, concerns regarding inefficient public expenditure, weak budget implementation, delayed project execution, procurement irregularities, and limited public access to expenditure information continue to undermine the effectiveness of federal budgeting. The existence of transparency frameworks has not always translated into improved budget performance across Ministries, Departments, and Agencies (MDAs).

The 2026 Federal Budget introduced unprecedented levels of public expenditure with ambitious developmental objectives spanning infrastructure, education, healthcare, security, and institutional development. However, the success of this budget depends largely on the transparency with which MDAs implement approved projects and report expenditure outcomes. Although government has strengthened digital financial management systems and expenditure monitoring mechanisms, questions remain regarding whether these reforms have significantly improved implementation efficiency and accountability.

This study therefore seeks to bridge this gap by examining the effect of public expenditure transparency on budget performance among selected Ministries, Departments, and Agencies in Abuja, with the objective of providing empirical evidence that can strengthen fiscal governance, improve accountability, and enhance the effectiveness of future federal budgets.

1.3 Aim of the Study

The main aim of this study is to examine the effect of public expenditure transparency on budget performance under the 2026 Federal Budget among selected Ministries, Departments, and Agencies in Abuja.

1.4 Objectives of the Study

The specific objectives are to:

1. examine the effect of public expenditure transparency on budget performance among selected MDAs in Abuja;

2. assess the influence of expenditure reporting and disclosure on the implementation of the 2026 Federal Budget;

3. determine the relationship between financial accountability mechanisms and budget performance in selected MDAs; and

4. identify the challenges affecting public expenditure transparency during the implementation of the 2026 Federal Budget.

1.5 Research Questions

The study seeks to answer the following questions:

1. What effect does public expenditure transparency have on budget performance among selected MDAs in Abuja?

2. How does expenditure reporting and disclosure influence the implementation of the 2026 Federal Budget?

3. What relationship exists between financial accountability mechanisms and budget performance?

4. What challenges affect public expenditure transparency during the implementation of the 2026 Federal Budget?

1.6 Research Hypothesis

H₀: Public expenditure transparency has no significant effect on budget performance under the 2026 Federal Budget among selected MDAs in Abuja.

1.7 Significance of the Study

This study will be valuable to the Federal Government of Nigeria, the National Assembly, Ministries, Departments and Agencies (MDAs), the Office of the Auditor-General for the Federation, the Fiscal Responsibility Commission, development partners, researchers, and public finance practitioners.

The findings will provide policymakers with empirical evidence on whether transparency initiatives are contributing to improved budget implementation and expenditure efficiency. This will support future reforms in public financial management and budget monitoring.

For MDAs, the study will identify institutional practices that enhance expenditure accountability, timely reporting, procurement compliance, and performance-based budgeting. It will also encourage greater adherence to transparency standards during budget execution.

The National Assembly and oversight institutions will benefit from evidence capable of strengthening legislative scrutiny, expenditure oversight, and value-for-money auditing during appropriation implementation.

Development partners and civil society organizations will gain current evidence for evaluating Nigeria’s progress in fiscal transparency and open government initiatives, thereby supporting accountability advocacy and governance reforms.

Academically, the study will contribute to literature on public sector accounting, budgeting, governance, and fiscal transparency by providing contemporary evidence based on the implementation of Nigeria’s 2026 Federal Budget.

1.8 Scope of the Study

This study focuses on public expenditure transparency and budget performance under the 2026 Federal Budget.

The geographical scope is limited to selected federal Ministries, Departments, and Agencies located in Abuja, Federal Capital Territory. The content scope covers expenditure transparency, budget implementation, expenditure reporting, financial accountability, procurement transparency, and budget performance during the 2026 fiscal year. The respondents will comprise finance officers, accountants, budget officers, internal auditors, procurement officers, and administrative personnel within the selected MDAs.

1.9 Operational Definition of Terms

Public Expenditure Transparency: The openness, accessibility, completeness, and timely disclosure of information relating to government budgeting, expenditure, procurement, and financial reporting.

Budget Performance: The extent to which approved budget objectives, projects, and expenditure targets are successfully implemented during the fiscal year.

Federal Budget: The annual financial plan of the Federal Government of Nigeria containing projected revenues, expenditures, and appropriations for public programmes and projects.

Ministries, Departments and Agencies (MDAs): Federal public institutions responsible for implementing government policies and utilizing appropriated public funds.

Financial Accountability: The obligation of public institutions to properly manage, report, justify, and account for the use of public financial resources in accordance with applicable laws and regulations.

Budget Implementation: The execution of approved budgetary allocations through expenditure, procurement, project delivery, monitoring, and performance reporting during the fiscal year.

Project – Public Expenditure Transparency and Budget Performance under the 2026 Federal Budget: Evidence from Selected MDAs in Abuja.