Nigeria Faces $4 Million Loss from World Bank Loan Due to Audit Standards Failure
In a significant setback, the Nigerian government is at risk of losing $4 million from a World Bank loan after failing to meet key audit standards in its revenue-generating agencies. This revelation comes from a World Bank restructuring paper dated June 2025, which highlights the country’s struggles with public financial management. The amount, equivalent to around N6.2 billion, could have been used to address one of Nigeria’s pressing infrastructural deficits.
The fund was part of the $103 million Fiscal Governance and Institutions Project, a credit facility from the International Development Association aimed at improving public financial management in Nigeria. However, the revenue assurance audit covering the Federal Inland Revenue Service (FIRS) and the Nigeria Customs Service for the 2018-2021 financial years was assessed as "not achieved" due to non-compliance with international auditing standards. The Independent Verification Agent noted that the reports submitted for verification did not meet the required standards, resulting in the failure to achieve the desired outcomes.
The unsuccessful audit was one of ten performance-based conditions under the project that the government could not deliver before the closing date of June 30, 2025. As a result, the Federal Ministry of Finance has formally requested the cancellation of $10.4 million in project funds. This includes $4.5 million tied to the uncompleted Revenue Assurance and Billing System, $1 million allocated to the development of a National Budget Portal, and $0.9 million in unused technical assistance funding.
The loss of these funds is a significant blow to Nigeria’s efforts to address its infrastructural deficits and improve its public financial management. The World Bank’s restructuring paper highlights the need for greater transparency and accountability in Nigeria’s revenue-generating agencies. As the country continues to grapple with economic challenges, the importance of meeting international audit standards cannot be overstated. The Nigerian government must now reassess its priorities and work towards improving its public financial management systems to avoid similar setbacks in the future.
