Nigeria to unveil public sector governance code after $10.5bn state losses
Nigeria's financial regulators are finalizing a long-delayed public sector governance code to restore investor confidence after state entity failures drained over $10.5 billion in public funds.
Nigeria is preparing to unveil a dedicated corporate governance code for public institutions before the end of 2025, aiming to close a regulatory void that has persisted for nearly a decade.
The Financial Reporting Council of Nigeria suspended a groundbreaking public sector governance framework in 2016 shortly after its introduction. While private companies received a replacement code in 2018, government ministries and state-owned entities have operated without formalized oversight standards since.
The economic toll of this absence is stark. Commercial lawyer and public sector expert George Etomi told the Chartered Institute of Directors that Nigeria Airways consumed $528 million in public funds before liquidation. He added that Ajaokuta Steel absorbed an estimated $10 billion over four decades without producing a single commercial ton of steel.
For investors, weak public governance undermines the broader operating environment and elevates systemic risk. Etomi noted that the Central Bank of Nigeria failed to publish its financial statements for seven consecutive years between 2016 and 2022, in direct breach of its own enabling legislation. Furthermore, institutional deficiencies have fueled significant financial crime. “The Nigeria Inter-Bank Settlement System reported that a staggering N52.26 billion was lost to bank fraud and forgeries in 2024 alone, with a significant portion linked to internal collusion and insider abuse,” Etomi said.
To address these structural failures, the FRCN formed a technical working group in 2023 to draft the Nigeria Public Sector Governance Code. An exposure draft applicable to all ministries, departments, agencies, and state-owned entities was circulated in early 2025. The FRCN presented the draft to the National Judicial Council in May, and a formal unveiling is targeted before the end of the year.
The urgency for these rules is reflected in independent assessments. Nigeria ranks 140th out of 180 countries on Transparency International’s Corruption Perceptions Index. A 2025 Transparency and Integrity Index found that only six out of 517 government agencies met minimum accountability benchmarks.
The World Bank has emphasised that strong institutions drive higher investment and stronger capital markets. Until public sector governance standards match those enforced in the private sector, multinational executives and institutional investors will continue to price a structural governance discount into Nigerian assets.
