By Taiwo Nolas-Alausa

The Chartered Institute of Directors Nigeria (CIoD Nigeria) strongly believes that the systemic weaknesses afflicting governance in our nation’s public sector and State-Owned Enterprises (SOEs) constitute a first-order national development emergency. Corruption, procurement fraud, weak board oversight, fiscal opacity, and the persistent culture of impunity in public institutions are not peripheral administrative failures; they are structural barriers to economic growth, investor confidence, and equitable service delivery for over 220 million Nigerians.

CIoD Nigeria calls on all levels of Government, the National and State Assemblies, regulatory authorities, and all relevant stakeholders to treat governance reform as an urgent, non-negotiable national priority and to enact the necessary institutional changes without further delay to ensure sustainable national development.

Nigeria has the institutional foundations, legislative frameworks, and natural resource base to become a transformative developmental state. What has persistently undermined this potential is not the absence of governance frameworks; it is the structural gap between framework design and operational reality, between law and enforcement, and between institutional mandate and institutional behaviour.

This gap has a measurable, compounding cost to the Nigerian economy and its citizens. Ranked 142nd out of 182 countries (score 26 out of 100) on the 2025 Corruption Perceptions Index (CPI) and below the Sub-Saharan African average on the 2024 World Bank’s Control of Corruption Indicator, Nigeria’s governance deficit is both statistically significant and internationally visible. The April 2026 IMF report titled “Budget Credibility in Sub-Saharan Africa” identified that weak oversight mechanisms, institutional and governance, significantly contribute to severe execution gaps. This justifies the call for sound governance across all levels of government.

Principal governance failures
We, therefore, identify these five interconnected categories of governance failure:
Weak SOE board governance: Many SOE boards are politically appointed without transparent criteria, limiting independence and effective oversight. This weakens accountability and contradicts OECD principles requiring competent and independent boards insulated from political interference.

Procurement corruption: Despite the Public Procurement Act 2007, contract splitting, politically influenced awards, and weak contract controls persist.

Fiscal opacity: Several SOEs fail to publish audited financial statements within statutory timelines, undermining transparency and limiting effective oversight by regulators, lawmakers, and citizens.

Weak internal controls: Internal audit and risk management functions across MDAs and SOEs remain under-resourced and insufficiently independent, reducing their ability to prevent or detect financial misconduct.

Weak enforcement and impunity: Governance breaches often go unpunished, weakening accountability and reducing governance frameworks to mere formalities rather than enforceable standards.

Assessment of existing frameworks
Nigeria possesses a relatively robust governance architecture supported by multiple legislative and regulatory frameworks. The Nigerian Code of Corporate Governance (NCCG) 2018, issued by the Financial Reporting Council of Nigeria (FRCN), provides a comprehensive governance benchmark for corporate entities. Complementary statutes such as the Fiscal Responsibility Act 2007, the Public Procurement Act 2007, the EFCC Act 2004, and the ICPC Act 2000 collectively establish a credible legal and institutional foundation for accountability, transparency, and ethical conduct in both the public and private sectors.

In addition, sector-specific governance frameworks issued by regulators such as the Central Bank of Nigeria (CBN), the National Insurance Commission (NAICOM), the Nigerian Exchange Group (NGX), and the Securities and Exchange Commission (SEC) have significantly strengthened governance practices within the financial services sector. Their relative success demonstrates that governance reforms can deliver measurable improvements when supported by effective oversight, regulatory commitment, and credible enforcement mechanisms.

However, despite the applicability of the Companies and Allied Matters Act (CAMA 2020) to certain State-Owned Enterprises (SOEs), significant governance gaps persist across the public sector. The primary challenge is not only the absence of governance frameworks but also the weakness of implementation and enforcement. Many governance codes applicable to public institutions lack clear sanctions, enforceable compliance obligations, mandatory reporting timelines, and sufficiently empowered oversight structures.

The proposed Nigerian Public Sector Governance Code, being developed by the FRCN, presents a critical opportunity to address these deficiencies and institutionalise governance standards across Ministries, Departments, Agencies, and SOEs. CIoD Nigeria, therefore, strongly advocates its urgent finalisation, formal adoption, and mandatory implementation, supported by clear enforcement provisions, periodic compliance assessments, and appropriate sanctions for violations.

Recommendations
As the premier Institute and leading voice in advocating for sound corporate governance in Nigeria, we therefore recommend;

To the government at all levels, national and atate Assemblies
Recognising that Nigeria’s aspiration to become a $1 trillion economy requires strong institutions, investor confidence, efficient public expenditure, and globally competitive state-owned enterprises, the government should:

Finalise and implement the Nigerian Public Sector Governance Code with mandatory compliance for all MDAs and federal SOEs, under the supervision of the FRCN and backed by enforceable sanctions, to strengthen institutional credibility and improve Nigeria’s attractiveness to domestic and foreign investors.

Establish transparent, merit-based appointment processes for SOE boards, with published qualification criteria and representation from professional bodies such as CIoD Nigeria, ensuring that public enterprises are led by competent professionals capable of driving economic growth and value creation.

Enact comprehensive whistleblower protection legislation with secure reporting channels, legal safeguards, and incentive mechanisms to strengthen fraud detection, reduce revenue leakages, and improve public resource management.

Enforce real-time budget reporting and public disclosure of government contracts through a transparent Federal Open Budget Portal aligned with global open contracting standards, enhancing fiscal transparency and investor confidence.

Accelerate governance reforms in strategic SOEs operating in infrastructure, energy, transportation, and finance sectors to improve operational efficiency, attract private capital, and support the administration’s economic transformation agenda.

To public sector leaders and SOE boards
Publish audited annual reports and governance compliance statements within six months of each financial year-end to strengthen transparency, facilitate investment decisions, and improve stakeholder confidence.

Strengthen internal audit and enterprise risk management functions by ensuring independence, adequate resourcing, and direct reporting to audit committees, thereby protecting public assets and improving organisational performance.

Prioritise continuous governance and director education as an essential professional responsibility, equipping leaders with the competencies required to manage increasingly complex economic and governance challenges.

Ensure greater representation of non-partisan Independent Non-Executive Directors (INEDs) on the boards of MDAs and SOEs to enhance board independence, diversity of perspectives, and strategic oversight.

Adopt performance-based governance frameworks that link board effectiveness and executive accountability to measurable service delivery, financial sustainability, and national development outcomes.

To governance advocacy organisations
Develop and publish an annual Nigerian Public Sector Governance Scorecard to benchmark MDAs and SOEs against clear governance criteria, strengthening transparency, institutional accountability, and public trust.

Expand director certification programmes to include specialised public sector and SOE governance modules, while institutionalising an annual Nigerian Governance Summit focused on governance reforms necessary for achieving Nigeria’s long-term economic ambitions.

Strengthen engagement with the National and State Assemblies through structured policy submissions on governance-related legislation and establish a dedicated Public Sector Governance Committee within CIoD Nigeria to drive sustained reform advocacy.

Sustainable economic expansion cannot be built on weak institutions, opaque decision-making, or ineffective public enterprises. Rather, it requires transparent governance systems, accountable leadership, efficient public resource management, and high-performing state institutions capable of catalysing private-sector growth and attracting long-term investment.

CIoD Nigeria is unequivocal: the governance deficiencies documented across Nigeria’s public sector and SOEs are not inevitable. They are the consequence of institutional weaknesses and policy choices that can be reversed through political commitment, governance innovation, and sustained reform implementation. Strengthening public sector governance is therefore not merely a compliance exercise; it is a strategic economic imperative central to improving productivity, enhancing investor confidence, reducing waste, and unlocking Nigeria’s growth potential.

CIoD Nigeria commits to partnering with the government, the National and State Assemblies, regulatory authorities, development partners, the private sector, and civil society to advance this reform agenda. We call on all stakeholders to embrace a national governance reform compact anchored on transparency, accountability, ethical leadership, and institutional excellence—the essential foundations for delivering the administration’s $1 trillion economy vision and securing sustainable prosperity for present and future generations of Nigerians.

Conclusion and call to action
Good governance is not a bureaucratic luxury; it is the foundational infrastructure of a functional state and a competitive economy, and a prerequisite for achieving Nigeria’s ambition to become a $1 trillion economy.

Dr Nolas-Alausa, is Director General/Chief Executive Officer, Chartered Institute of Directors (CIoD) Nigeria.