The Nigerian government risks forfeiting $10 million in World Bank financing before June 30, 2025, due to inadequate audit practices, delays in deploying a national budget portal, and sluggish implementation of a revenue system. This is according to a World Bank restructuring document.
The amount at risk is part of the $103 million Fiscal Governance and Institutions Project (FGIP), a public finance management initiative backed by the International Development Association (IDA), the World Bank’s concessional lending arm.
The restructuring document, addressed to the Federal Ministry of Finance and reviewed by Nairametrics, outlines the key issues that may lead to the forfeiture of funds.
A review of revenue assurance audits covering the Federal Inland Revenue Service (FIRS) and the Nigeria Customs Service (NCS) from 2018 to 2021 received a failing assessment. The reports submitted did not meet international auditing standards.
The Ministry of Finance has also requested the cancellation of $0.9 million in unutilized technical assistance funding and $9.5 million linked to 10 performance-based conditions deemed unachievable before the project’s scheduled closure on June 30, 2025.
These cancelled allocations include $4 million earmarked for FIRS and NCS auditing, which similarly failed to meet international standards.
“These Intermediate Results (IRs), to be implemented by the Office of the Auditor-General for the Federation (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 restructuring document states.
Further, obligations such as the establishment of a National Budget Portal for publishing federal capital budgets, alongside those of at least 20 states, remain incomplete, despite $1 million in allocated funding.
The Revenue Assurance and Billing System (RABS), for which $4.5 million was allocated, has faced similar implementation delays. According to the documentation, only 27 out of 55 Federal Government-Owned Enterprises (FGOEs) have established Treasury Single Account (TSA) sub-accounts for foreign revenue collection, falling short of the program’s benchmarks.
Contract management challenges, protracted vendor negotiations, and unresolved indemnity requirements from the Central Bank of Nigeria further delayed RABS deployment.
Consequently, RABS completion is now projected for August 2025—two months after FGIP’s scheduled conclusion.
Despite falling short on multiple objectives, the FGIP achieved notable gains in revenue collection. Nigeria’s non-oil revenue reached 153% of its 2024 budget projection, a significant improvement from the 2018 baseline of 64.9%.
This growth was driven by the government’s exchange rate consolidation policy, enhanced tax administration via the TaxProMax platform, and automated remittance systems across Ministries, Departments, and Agencies (MDAs).
However, capital expenditure performance remains below par, at just 50%, compared to the 65% benchmark.
Nigeria also exceeded expectations in publishing harmonized economic and fiscal data, delivering 10 publications, well above the project’s target of six.
Still, the World Bank rated the project’s monitoring and evaluation framework as “moderately unsatisfactory,” citing challenges with implementation and oversight.
While the $10 million forfeiture looms, Nigeria has made meaningful progress in financial sector reforms, particularly in revenue generation and fiscal transparency.
However, persistent delays and audit deficiencies highlight deeper issues in governance and financial management. Future progress will depend on addressing structural weaknesses, strengthening accountability, and enhancing project implementation capacity to ensure Nigeria fully benefits from international funding and continues improving its fiscal governance.
