FG Risks Losing $10m World Bank Loan Over Audit Failures
The federal government is expected to forfeit $10 million from a World Bank credit due to audit shortcomings, delays in launching a national budget portal, and slow implementation of a revenue assurance system.
The fund is part of the $103 million fiscal governance and institutions project (FGIP), a public financial management initiative financed through a credit facility from the International Development Association, a lending arm of the World Bank.
Details of the borrowing are contained in the World Bank’s June 2025 restructuring paper addressed to the federal ministry of finance (FMF).
The fund is scheduled to close on June 30.
“The FMF has requested cancellation of $0.9 million of unused funds for Technical Assistance (TA) and $9.5 million, which is the amount allocated to 10 performance-based conditions (PBCs) which will not be achieved by the close of the project on June 30, 2025,” the document reads.
Among the cancelled items is a $4 million audit of key revenue-generating agencies — the Federal Inland Revenue Service (FIRS) and the Nigeria Customs Service (NCS) — which was deemed substandard by the global bank.
“These intermediate results (IRs) to be implemented by the OAuGF were assessed as not achieved by the independent verification agent (IVA) because the reports submitted for verification did not meet the requisite international auditing standards,” the World Bank said.
“Deployment of a National Budget Portal to publish the capital budgets of the FGN and at least 20 states by the BOF, with an allocation of $1 million. The BOF did not submit evidence of achievement for the IR.
“Implementation of the Revenue Assurance and Billing System (RABS), with an allocation of $4.5 million. Two IRs – 2.5 and 2.6 – were submitted for verification but were assessed in IVA report 6 as not achieved.
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“This was because there was evidence for only 27 out of the 55 FGOEs setting up a Treasury Single Account (TSA) sub-account for foreign earned revenues, and there was no automatic split and transfer of foreign earned revenues to the Consolidated Revenue Fund (CRF) as required.
“The remaining IRs 2.7-2.9 will not be achieved before the Project closes because of delays due to: (i) Contract management issues: the FMF is in the process of expanding the RABS implementation consortium to include another vendor, (ii) pending finalization of the indemnity letter requested by the Central Bank of Nigeria (CBN) from the FMF to ensure that the CBN is not liable for any potential errors arising from the automatic transfers of funds from the TSA sub-accounts of FGOEs to the CRF.
“Given these delays, RABS implementation is expected to be completed in August 2025, which will be after FGIP closes.”
According to the document, despite missed targets by the federal government, the FGIP recorded progress in other areas, including revenue performance.
The World Bank report said non-oil revenue outturn was 153 percent of the budgeted target in 2024, up from a baseline of 64.9 percent in 2018.
The bank attributed the increase to Nigeria’s exchange rate unification policy, improved tax administration via the TaxProMax system, and reforms that automated revenue remittances from ministries and agencies.
In addition, the report said the capital expenditure execution remains below expectations at 50 percent, short of the 65 percent target.
The World Bank said the country exceeded expectations in publishing reconciled economic and fiscal datasets, achieving 10 publications against the project target of six.
However, project monitoring and evaluation were rated as “moderately unsatisfactory” by the global bank.
Other areas of progress include the launch of the electronic register of beneficial owners by the Corporate Affairs Commission (CAC), which now covers about 40 percent of registered businesses, the publication of a national asset registry, and financial reports by the Ministry of Finance Incorporated (MOFI).
The World Bank said the final disbursement on the project is estimated at $96.04 million, which represents 93 percent of the pre-cancellation total of $103 million.
