Artificial Intelligence Adoption and Government Financial Reporting Transparency: Evidence from Nigeria's Federal Public Sector

Transparency is widely expected to sustain public trust in government, and artificial intelligence (AI) is increasingly proposed as a means of making public financial information more open, timely and understandable. This study examines whether the overall level of documented AI adoption is associated with the transparency of government financial reporting in Nigeria's federal public sector, and what the evidence implies for public trust. A balanced panel of five federal institutions: the Federal Ministry of Finance, the Office of the Accountant-General of the Federation, the Federal Inland Revenue Service, the Central Bank of Nigeria and the Bureau of Public Procurement were observed from 2015 to 2024. Documentary evidence from annual reports, audit-related documents and AI-implementation documents is scored on a five-point (0–4) rubric and analysed with pooled, fixed-effects, trend-adjusted, first-difference and lagged regressions, interpreted through agency theory. Overall AI adoption is positively and significantly associated with transparency and credibility of financial reports (pooled β = 0.701, R² = 0.810; fixed-effects β = 0.708). Unlike the study's other AI–outcome relationships, however, this one is not robust throughout: the trend-adjusted coefficient (0.616) is only marginally significant (p = 0.051), and the first-difference coefficient (0.604) is not statistically significant (p = 0.112), although the lagged estimate (0.599) is. Transparency also has the lowest mean score of the five outcomes. The outcome is a documentary score of openness and credibility, not a survey of citizens, so the results speak to the supply of transparency and cannot establish public trust itself. Because the design is observational, the measures are documentary indices, and the sample is small and purposively selected, the results indicate association rather than proven causation and are interpreted for the five institutions examined rather than for all federal ministries, departments and agencies. AI adoption appears to be a helpful but insufficient condition for transparent reporting; communication, civic capacity and audit validation matter too.