The Nigerian federal government is poised to forfeit $10 million from a crucial World Bank credit facility, a consequence of significant audit shortcomings, delays in deploying a national budget portal, and sluggish implementation of a vital revenue assurance system.
This substantial forfeiture is part of the $103 million Fiscal Governance and Institutions Project (FGIP), a key public financial management initiative backed by a credit facility from the International Development Association, the World Bank’s lending arm. The details of this forfeiture are outlined in the World Bank’s June 2025 restructuring paper, addressed directly to Nigeria’s Federal Ministry of Finance (FMF). The project is slated to close on June 30, 2025.
“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 states.
Among the cancelled items is a critical $4 million allocation for the audit of key revenue-generating agencies, namely the Federal Inland Revenue Service (FIRS) and the Nigeria Customs Service (NCS). This audit was deemed “substandard” by the global financial institution. The World Bank explicitly stated, “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.”
Further setbacks include the non-deployment of a National Budget Portal, a crucial tool for publishing the capital budgets of the Federal Government of Nigeria (FGN) and at least 20 states. This component, allocated $1 million, saw the Bureau of the Budget (BOF) failing to submit evidence of its achievement.
The implementation of the Revenue Assurance and Billing System (RABS), with an allocation of $4.5 million, also faced significant hurdles. Two key intermediate results (IRs 2.5 and 2.6) submitted for verification were not achieved. This was due to insufficient evidence of only 27 out of 55 Federal Government Owned Enterprises (FGOEs) establishing Treasury Single Account (TSA) sub-accounts for foreign earned revenues, and the absence of an automatic split and transfer of these foreign revenues to the Consolidated Revenue Fund (CRF) as required.
The remaining RABS IRs (2.7-2.9) are unlikely to be achieved before the project’s closure. Delays are attributed to: (i) contract management issues, with the FMF in the process of expanding the RABS implementation consortium to include another vendor; and (ii) pending finalization of an indemnity letter requested by the Central Bank of Nigeria (CBN) from the FMF, aimed at absolving the CBN from liability for potential errors arising from automatic fund transfers from FGOEs’ TSA sub-accounts to the CRF. Given these delays, RABS implementation is now projected for completion in August 2025, after the FGIP concludes.
Despite Setbacks, Progress Noted in Other Areas
Despite these missed targets, the World Bank document acknowledges that the FGIP has made commendable progress in other areas, particularly in revenue performance and data transparency.
The report highlighted that Nigeria’s non-oil revenue outturn reached 153% of its budgeted target in 2024, a significant improvement from a baseline of 64.9% in 2018. The bank credited this increase to Nigeria’s exchange rate unification policy, enhanced tax administration through the TaxProMax system, and reforms that automated revenue remittances from ministries and agencies.
Furthermore, the country exceeded expectations in publishing reconciled economic and fiscal datasets, achieving 10 publications against a project target of six. Other areas of progress include the launch of an electronic register of beneficial owners by the Corporate Affairs Commission (CAC), now covering approximately 40% of registered businesses, and the publication of a national asset registry and financial reports by the Ministry of Finance Incorporated (MOFI).
However, project monitoring and evaluation were rated as “moderately unsatisfactory” by the global bank, underscoring ongoing challenges in oversight.
Ultimately, the final disbursement on the project is estimated at $96.04 million, representing 93% of the pre-cancellation total of $103 million.
