The Senate on Wednesday advanced a far-reaching bill aimed at bringing billions of naira in foreign aid and donor-funded interventions under stricter government oversight, citing growing concerns over accountability gaps, financial transparency and potential national security risks associated with unregulated funding to non-governmental organisations (NGOs).

The proposed legislation, sponsored by Senator Ibrahim Hassan Dankwambo (Gombe North), passed second reading after lawmakers argued that foreign grants, humanitarian assistance and donor-funded projects flowing into Nigeria have for years operated under a fragmented system that allows significant funds to escape effective monitoring.

Leading the debate, Dankwambo said Nigeria remains one of Africa’s major recipients of grants, technical assistance, humanitarian support and concessional financing from bilateral and multilateral development partners, yet the country lacks a comprehensive legal framework to coordinate and track such inflows.

He warned that donor-funded projects are scattered across ministries, departments and agencies, while many interventions are implemented outside the national budget process, resulting in duplication, weak coordination and poor accountability.

According to him, the bill seeks to ensure that all foreign assistance received in Nigeria is brought under constitutional oversight and fully integrated into the country’s fiscal and development planning architecture.

The proposed legislation would establish a National Donor Coordination Framework, compel the registration of all donor-funded projects, create a national database of foreign assistance, integrate donor interventions into government budgets, mandate public disclosure of funding and implementation details, and prescribe sanctions for the diversion, misuse or non-registration of foreign aid.

The bill drew overwhelming support from lawmakers, many of whom expressed alarm over the lack of visibility into donor funds channelled through NGOs and state governments.

Senate Chief Whip Tahir Monguno described the legislation as both timely and necessary, arguing that donor agencies currently determine the disbursement of foreign assistance with little domestic coordination.

Deputy Senate President Barau Jibrin said while foreign assistance received directly by the Federal Government is often reflected in the national budget, substantial funding channelled to NGOs and sub-national governments remains largely beyond public scrutiny.

“We can’t tell what money goes into the coffers of NGOs. Fraudsters set up bogus, pseudo NGOs and collect money from there,” Barau said.

He noted that concerns over unregulated donor funding had persisted for years without an effective legal mechanism, urging lawmakers to ensure the bill is enacted.

Senator Adamu Aliero said stronger regulation would not only improve the utilisation of donor funds but also encourage development partners to provide more assistance through a transparent and accountable framework.

Recalling previous oversight activities of the Senate Committee on Agriculture, Aliero said lawmakers had encountered situations where donor funds were received but their utilisation could not be satisfactorily explained.

He urged that the legislation should expressly cover state governments and NGOs in order to strengthen the National Assembly’s oversight powers.

Chairman of the Senate Committee on Finance, Senator Sani Musa, argued that the proposed law would align Nigeria with international best practices while enhancing donor confidence through improved transparency.

He also raised security concerns over donor funds allegedly escaping scrutiny.

“Most of the aids coming to so-called NGOs are not subjected to scrutiny. We have seen instances where such arrangements create security concerns because we do not know who is accounting for what. Is it insurgents taking money meant for victims?” Musa queried.

He added that the legislation would clearly distinguish foreign investments from grant inflows, thereby improving fiscal planning and coordination.

Former Edo State Governor and Senator Adams Oshiomhole insisted that every donor fund entering Nigeria should be properly disclosed, documented and subjected to legislative oversight.

He advocated mandatory disclosure of resources transferred to NGOs and civil society organisations, alongside stiff sanctions for non-compliance.

President of the Senate, Godswill Akpabio also endorsed the proposal, warning that unchecked foreign funding could pose risks to national security if left outside an effective regulatory framework.

At the end of the debate, the Senate referred the bill to the Committees on National Planning and Economic Development and Finance for further legislative scrutiny, directing them to report back within four weeks.