ABUJA, Nigeria (VOICE OF NAIJA)-The Federal Government stands to forfeit $4 million from a World Bank loan after failing to meet auditing standards tied to a major revenue reform initiative involving the Federal Inland Revenue Service (FIRS) and the Nigeria Customs Service.
The fund was part of the $103 million Fiscal Governance and Institutions Project, a public financial management programme supported through a credit facility from the International Development Association.
According to a World Bank restructuring paper dated June 2025, the revenue assurance audit for FIRS and Customs, covering the 2018 to 2021 financial years, was assessed as not achieved because the audit reports submitted did not comply with international standards.
A World Bank document obtained on Sunday stated “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 $4m.
“These Intermediate Results to be implemented by the Office of Auditor-General of the Federation were assessed as not achieved by the Independent Verification Agent because the reports submitted for verification did not meet the requisite international auditing standards.”
The failed audit was among ten performance-based conditions the government was expected to fulfil under the project but failed to meet before the project’s closing date of June 30, 2025.
Consequently, the Federal Ministry of Finance formally requested the cancellation of $10.4 million in project funds.
“The FMF has requested cancellation of $0.9m of unused funds for Technical Assistance and $9.5m, which is the amount allocated to 10 Performance-Based Conditions, which will not be achieved by the close of the Project on June 30, 2025,” the document added.
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A further breakdown of the World Bank-supported Fiscal Governance and Institutions Project shows that $4.5 million was tied to the incomplete Revenue Assurance and Billing System, while $1 million was allocated for the development of a National Budget Portal.
According to the document, the Budget Office of the Federation, responsible for delivering the portal, did not submit any evidence of achievement.
Additionally, $0.9 million in technical assistance funds remained uncommitted and has now been cancelled.
The document stated, “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 from the technical assistance component.”
This marks the second major funding adjustment.
A previous restructuring in June 2024 saw $22 million removed from the original $125 million budget, reducing the project envelope to $103 million.
With this new cancellation, the total project funding now stands at $92.6 million.
Launched in June 2018 and operational from May 2019, the Fiscal Governance and Institutions Project was aimed at strengthening the credibility of public finance and national statistics through key reforms in revenue management, budget transparency, and data systems.
Despite missing several performance benchmarks, the project recorded gains in specific areas, particularly in revenue generation.
The World Bank reported that non-oil revenue outturn in 2024 reached 153 per cent of the budget target, up from 64.9 per cent in 2018.
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The increase was attributed to exchange rate unification, improvements in tax administration through the TaxProMax platform, and automation of revenue remittances by ministries and agencies.
The government also exceeded its goal for publishing reconciled economic and fiscal data sets, achieving 10 publications against a target of six.
However, capital expenditure performance remained below expectations, with execution at 50 per cent short of the 65 per cent target. Project monitoring and evaluation were also rated as moderately unsatisfactory.
Other key milestones include the launch of the Electronic Register of Beneficial Owners by the Corporate Affairs Commission, now covering around 40 per cent of registered businesses, and the publication of a National Asset Registry and financial reports by the Ministry of Finance Incorporated.
The final disbursement for the project is projected at $96.04 million, representing 93 per cent of the pre-cancellation total of $103 million.