The Nigerian government is at risk of forfeiting $4 million (approximately ₦6.2 billion) from a World Bank loan due to its failure to meet key audit benchmarks in critical revenue-generating agencies, including the Federal Inland Revenue Service (FIRS) and the Nigeria Customs Service (NCS).
This revelation is contained in a World Bank restructuring paper dated June 2025, which evaluated the status of the $103 million Fiscal Governance and Institutions Project, a public financial management reform initiative financed through a credit facility from the International Development Association (IDA).
According to the report, the $4 million in question was specifically allocated to a “Revenue Assurance Audit” for the financial years 2018 to 2021.
The audit, which was to be implemented by the Office of the Auditor-General of the Federation (OAuGF), was intended to assess and improve revenue transparency and accountability within FIRS and NCS.
However, the report stated that the Independent Verification Agent (IVA) assessed the audit as “not achieved” because the reports submitted did not meet international auditing standards.
“Revenue assurance audit of Main Income Generating Agencies, including the Federal Inland Revenue Service and the Nigeria Customs Service for FY 2018–2021, with an allocation of $4 million… was assessed as not achieved by the Independent Verification Agent because the reports submitted for verification did not meet the requisite international auditing standards,” the document noted.
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The failed audit is one of ten performance-based conditions attached to the project that the Nigerian government could not meet before the scheduled project closing date of June 30, 2025. As a result, the Federal Ministry of Finance (FMF) has formally requested the cancellation of $10.4 million in undisbursed funds.
Breakdown of the requested cancellations includes: $0.9 million for unused technical assistance funds; $9.5 million tied to performance-based conditions that were not achieved.
In addition to the $4 million audit shortfall, further analysis shows that: $4.5 million was tied to the uncompleted Revenue Assurance and Billing System.
$1 million was allocated to the development of a National Budget Portal, but the Budget Office of the Federation failed to submit any verifiable evidence of progress.
The document concludes that these failures in meeting core project milestones not only jeopardize access to critical funds but also highlight persistent institutional weaknesses in Nigeria’s public financial management architecture.
The potential loss of these funds comes at a time when Nigeria is grappling with severe infrastructural deficits, revenue shortfalls, and mounting public debt.
Observers have noted that the forfeited funds could have significantly supported essential reforms or capital projects, particularly in the areas of tax administration, digital budgeting, and transparency.
This setback is also likely to raise concerns within international donor and development finance institutions about Nigeria’s capacity to implement result-based reform programs and meet basic standards of financial accountability.