A new bill before Nigeria’s senate is raising important questions about transparency, accountability and the enabling environment for civil society.

The Foreign Aid (Regulation, Coordination, Transparency and Disclosure) Bill, 2026 (SB.1034), sponsored by Senator Ibrahim Hassan Dankwambo and passed for second reading on 22 July 2026, proposes the creation of a Foreign Aid Regulatory Commission (FARC) with broad powers over organisations and entities receiving foreign assistance, including NGOs and civil society organisations.

The stated objective: preventing the diversion and misuse of foreign assistance, is important but the Nigeria Network of NGOs (NNNGO) analysis highlights concerns that the proposed framework could create additional regulatory burdens, duplicate existing mechanisms and place new restrictions on organisations that receive international funding.

What would the Bill change?

Under SB.1034, recipients of foreign aid including government institutions, NGOs, CSOs and private entities would be required to:

• Register with FARC within 30 days of receiving foreign aid, with non-registration potentially constituting a criminal offence;

• Publicly disclose information on the source, amount, purpose, conditions and implementing partners of grants through a proposed national register;

• Undergo mandatory annual independent audits in addition to existing reporting requirements; and

• Align funded projects with government development priorities, with proposed fines of up to ₦20 million (approximately 14,700 USD) and prison sentences of up to five years for violations.

The debate, therefore, is not about whether foreign aid should be transparent. Rather, it is about whether a new regulatory structure is necessary and proportionate when mechanisms for transparency and oversight already exist.

“SB.1034 is not a transparency reform — it is a step backwards. Nigeria already has the tools to track foreign aid, and civil society has spent a decade securing a risk‑based, rights‑respecting framework for nonprofit regulation. This Bill would undo that progress by duplicating existing systems, criminalising routine NGO activity, and blurring the constitutional line between public funds and private donations. Treating independent associations as if they were government ministries is not oversight; it is overreach. Nigeria can strengthen accountability without weakening civic space, and we should insist on solutions that build on what already works rather than resurrecting models our Parliament has rejected four times before.” - Oyebisi, B. Oluseyi, Executive Director, Nigeria Network of NGOs.

A risk of regulatory regression

The Bill also comes after years of civil society advocacy around Nigeria's anti-money-laundering framework.

Following a risk-based assessment and changes to international standards, Nigeria moved towards a more targeted approach to regulating non-profit organisations, rather than treating the entire sector as subject to the same anti-money-laundering requirements. This reflects the FATF’s revised Recommendation 8, which calls for proportionate, risk-based measures that do not disrupt legitimate civil society activities.

NNNGO warns that SB.1034 could risk reintroducing similar registration, reporting and sanctions requirements through a new institutional mechanism.

“The SCUML reforms were a landmark victory for Nigeria’s civil society. For the first time, our regulatory framework recognised what global standards have long required — that nonprofits should be supervised through a targeted, risk‑based approach, not blanket suspicion. Removing NGOs from the high‑risk reporting list was the product of years of evidence, dialogue and principled advocacy. It aligned Nigeria with FATF Recommendation 8 and freed organisations to focus on serving communities rather than navigating rules designed for car dealerships and pawnbrokers. Any proposal that drags us back to that era is not just inefficient; it undermines a reform the sector fought for and won.” Oyebisi Oluseyi further says.

This is particularly significant because international standards increasingly emphasise risk-based and proportionate approaches to regulating civil society, rather than blanket restrictions.

Foreign funding is also about civic space

The Bill's broad definition of foreign aid raises another important issue: government funds and private grants received by independent civil society organisations are fundamentally different. While public resources are subject to public financial oversight, the ability of independent associations to seek and receive resources is closely connected to their freedom of association.

International human rights standards recognise the right of associations to seek, receive and use resources, including from foreign and international sources.

Restricting access to funding can therefore have consequences far beyond financial management: potentially shaping which organisations can operate, which issues they can address and whose voices can participate in public debate.

Transparency without shrinking civic space

NNNGO's position is not against transparency in foreign aid. Civil society has a clear interest in ensuring that development resources are used responsibly and accountably.

The challenge is to ensure that regulation strengthens transparency without undermining the independence of civil society.

As the Bill moves forward, NNNGO is calling for an approach that builds on existing systems, avoids unnecessary duplication, applies proportionate and risk-based regulation and protects the ability of civil society organisations to access resources and operate independently.

" What we need now is investment in the tools that work — the national aid dashboard, targeted AML/CFT supervision, and genuine collaboration between government and civil society. Any future legislation should build on these assets, not duplicate them or criminalise organisations that are already compliant. The path to accountability is partnership, evidence and proportional regulation. If we stay anchored in those principles, Nigeria can protect both the integrity of foreign assistance and the constitutional freedoms that allow civil society to thrive.” Oyebisi concludes.

Nigeria's debate reflects a wider global question: how can governments strengthen accountability while protecting the enabling environment that allows civil society to contribute to development, democracy and public life?

For Forus and its network of members, the answer must be both: transparency and civic space should reinforce each other, not come at the expense of one another.

Disclaimer: Information used for this piece was collected from the NNNGO website