FG is set to forfeits $4m World Bank Loan over substandard audit reports.
NewsOnline Nigeria reports that the Federal Government risks losing $4 million in World Bank funding after failing to meet international audit standards on a critical revenue assurance initiative involving the Federal Inland Revenue Service (FIRS) and the Nigeria Customs Service.
The fund, earmarked under the $103 million Fiscal Governance and Institutions Project, was part of a broader financial management reform financed through a credit facility from the International Development Association (IDA).
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A World Bank restructuring document, dated June 2025 and reviewed by The PUNCH, revealed that the audit reports covering FIRS and Customs for the 2018–2021 financial years were rejected for falling short of international auditing benchmarks.
“Revenue assurance audit of Main Income Generating Agencies, including the FIRS and the Nigeria Customs Service for FY 2018–2021, with an allocation of $4m… was assessed as not achieved,” the document stated. “The reports submitted for verification did not meet the requisite international auditing standards,” it added, citing assessments by the Independent Verification Agent.
The audit shortfall is among ten performance-based conditions that the government failed to deliver before the project’s June 30, 2025, closing date. Consequently, the Federal Ministry of Finance has formally requested the cancellation of $10.4 million in unused project funds.
This cancellation includes $0.9 million in unutilised technical assistance funds and $9.5 million tied to unmet performance-based conditions, including $4.5 million for the uncompleted Revenue Assurance and Billing System, and $1 million intended for a National Budget Portal. The Budget Office of the Federation reportedly provided no evidence of progress on the portal.
“The proposed change is to cancel the $10.4m, constituting $9.5m for PBCs that will not be achieved and verified by the closing date, and $0.9m uncommitted funds,” the World Bank stated.
This marks the second major adjustment to the project. In June 2024, $22 million was dropped from the original $125 million allocation, reducing the project’s funding to $103 million. With the latest cancellation, total financing now stands at $92.6 million.
Launched in June 2018 and operational from May 2019, the Fiscal Governance and Institutions Project aims to enhance public finance credibility and transparency through reforms in tax administration, budgeting, and national data systems.
Despite setbacks, the project achieved gains in other areas. According to the World Bank, Nigeria’s non-oil revenue performance surged to 153 per cent of the budgeted target in 2024, up from 64.9 per cent in 2018. The improvement was attributed to the unification of the exchange rate, automation of revenue remittances, and enhanced tax administration through the TaxProMax platform.
Progress was also noted in fiscal transparency, with 10 reconciled economic and fiscal datasets published, surpassing the project’s target of six.
Nonetheless, concerns remain. Capital expenditure execution fell short at 50 per cent, below the 65 per cent target, and the project’s monitoring and evaluation component was rated “moderately unsatisfactory.”
Other achievements include the launch of the Corporate Affairs Commission’s Electronic Register of Beneficial Owners—covering roughly 40 per cent of registered businesses—as well as the publication of a National Asset Registry and financial statements by the Ministry of Finance Incorporated.
Final disbursement under the project is expected to reach $96.04 million, representing 93 per cent of the pre-cancellation total of $103 million.
