Foreign Aid Regulation Bill: Safeguard or Shackles for Civil Society?

Nigeria’s 10th National Assembly is considering the Foreign Aid (Regulation, Transparency and Disclosure) Bill, 2026 (SB. 1034). On the outlook, the Bill promises accountability, transparency, and alignment of foreign aid with national priorities. In an era of heightened concern about terrorism financing, such regulation may appear necessary. However, beneath its good intentions lies a framework that could strangle civil society and weaken the very communities aid is meant to serve.

Moreover, the simple question: Is the proposed law truly about accountability, or is it about control?
What the Bill Seeks: The Bill plans to establish a Foreign Aid Regulatory Commission (FARC) to register, monitor, and audit all foreign aid inflows. The big question is: why another agency in a country already borrowing heavily to fund development interventions?

With this Bill, NGOs would be required to: register within 30 days of receiving aid; disclose donor details, amounts, conditions, partners, and utilisation reports — all made publicly accessible; submit to annual independent audits and align projects strictly with national development plans; face punitive penalties: ₦5,000,000 fines or imprisonment for individuals, and ₦20,000,000 fines plus license revocation for organisations.

So, individuals are not left out. Small NGOs, already stretched thin, will be burdened by excessive bureaucracy occasioned by compliance paperwork, risking their vital role in fostering trust within communities. The Bill’s requirements, like mandatory registration and disclosure, could limit NGO independence, posing potential threats to civil society’s autonomy and effectiveness. This Bill can be largely classified as Government Overreach. The mandatory alignment with government priorities weakens NGOs’ liberty to identify local priorities and restricts community-driven initiatives.

In addition, public disclosure of donor and project details could expose NGOs to harassment, politicisation, or security threats, especially in sensitive environments. Imagining such risks emphasises the need for safeguards to protect civil society actors.

The punitive penalties are excessive; administrative lapses, not deliberate misuse, could land NGO leaders in jail or bankrupt organisations. Just imagine when the law is used to target NGOs and their leaders. Donor confidence is crucial; if Nigeria is perceived as hostile to civil society, international partners may redirect funds elsewhere, risking Nigeria’s development progress and global standing.

The real implications, therefore, if passed in its current form, are that the Bill will shrink civic space, reduce aid flows, and force smaller NGOs to shut down. Grassroots communities, the most vulnerable, will be left without support. What is framed as a tool against terrorism financing risks becoming a weapon of state control.

Acknowledging that civil society is not rejecting accountability, NGOs are already subjected to several regulatory agencies, for instance:
Agency
Role for NGOs
Key Requirements

Corporate Affairs Commission (CAC)
Oversees registration of NGOs as Incorporated Trustees under CAMA 2020.

• Name reservation and incorporation – Annual returns filing – Governance compliance (trustees, constitution)

National Revenue Service (NRS)
Tax authority ensuring NGOs comply with tax laws.

• Obtain Tax Identification Number (TIN) – File tax returns (even if exempt) – Withholding tax compliance

Special Control Unit Against Money Laundering (SCUML)
Supervises NGOs and DNFBPs to prevent money laundering and terrorism financing.

• Mandatory SCUML registration – Suspicious transaction reporting – Compliance audits

Financial Reporting Council of Nigeria (FRCN)
Ensures financial transparency and accountability.

• Compliance with financial reporting standards – Submission of audited accounts

National Planning Commission (NPC)
Regulates NGOs involved in international development.

• Registration for foreign-funded projects – Alignment with national development priorities

Labour & Employment Agencies
Oversees employment practices.

• Compliance with labour laws – Pension and social insurance contributions

Data Protection Commission (NDPA)
Regulates data privacy and protection.

• Compliance with the Nigeria Data Protection Act – Safeguarding donor and beneficiary data

For instance, SCUML is Nigeria’s regulatory body responsible for monitoring and supervising designated Non-Financial Businesses and Professions (DNFBPs) to ensure compliance with Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) laws.

These agencies have not outlived their responsibilities; they can be empowered to ensure transparency without duplicating mandates or creating another costly bureaucracy. This approach fosters a sense of partnership and shared responsibility, rather than conflict or suspicion. Nigeria must combat terrorism financing, but not at the expense of civil society.

This Bill, as drafted, risks silencing NGOs and weakening democracy. Lawmakers should embrace a balanced regulatory framework that ensures accountability while preserving the independence and vitality of NGOs. Civil society is ready to partner with government in safeguarding aid. What it cannot accept is being shackled by laws that treat NGOs as suspects rather than allies.

Austin Aigbe FSM, wrote from Abuja; he can be reached by email: aigbeomoruyi@gmail.com

Foreign Aid Regulation Bill: Safeguard or Shackles for Civil Society?