Muhammadu Buhari explained the funding, which will be available as grants to states, was a move to improve transparency and accountability in the public sector, speaking at the annual conference of Auditors General in Nigeria earlier this week.

The money would also be aimed at fighting corruption, he added.

Buhari said: “At the state level, several measures have been introduced to achieve certain minimum improvements in governance and PFM.

“These include the state Fiscal Transparency, Accountability and Sustainability programme, in which $700m will be made available as grants to states,” he was quoted as saying, by Nigerian news outlet The Nation.

Buhari added that $50m would be made available in technical assistance to “key agencies” within the local governments  “to build capacity”. 

The government wants to strengthen Nigeria’s economy, improve security and fight corruption, the president explained.  

Buhari said: “Recently, I approved several sweeping reforms in the public finance sector so as to further reduce and drive up revenue.”

These reforms include performance monitoring and targets for revenue generating government-owned enterprises. The accounts of these enterprises will now be audited within four months after the end of each financial year, he said.

Buhari added there had been “tremendous achievements” in introducing reforms in Nigeria but “that the desired level in the fight against corruption is yet to be attained”.

The president said: “The role of [auditors] to the success of these new reforms can therefore not be overemphasised.”

New measures for expenditure controls, budgeting and financial reporting requirements, as well as financial oversight have also been set, he added.

In the summer the World Bank provided a $750m loan to Nigeria’s programme to improve governance and PFM within the country’s local government.  The money was also aimed at improving Nigerian states’ efficiency in spending, as well as strengthening revenue collection and service delivery.