Nigeria Just Lost $4 Million — And You Won’t Believe WhyThe Federal Government is set to forfeit $4 million from a World Bank-funded loan after failing to meet auditing standards tied to a crucial revenue reform initiative involving the Federal Inland Revenue Service (FIRS) and the Nigeria Customs Service.
This amount is part of a $103 million Fiscal Governance and Institutions Project, a financial management reform program supported by a credit line from the International Development Association (IDA).
According to a June 2025 World Bank restructuring document, an audit covering revenue activities at FIRS and Customs between 2018 and 2021 did not meet international auditing standards. As a result, it was marked as “not achieved” by the World Bank’s Independent Verification Agent.
The document stated:
“Revenue assurance audit of Main Income Generating Agencies, including the FIRS and Nigeria Customs for FY 2018–2021, with a $4 million allocation, was assessed as not achieved due to failure to meet international auditing standards.”
The audit was one of ten performance-based indicators the government had to deliver before the project’s closing date of June 30, 2025. With these targets unmet, the Federal Ministry of Finance has formally requested to cancel $10.4 million in unused funds.
This includes $0.9 million unspent under the Technical Assistance component and $9.5 million tied to the unachieved performance targets. A major portion—$4.5 million—was linked to the uncompleted Revenue Assurance and Billing System, while $1 million was allocated to the creation of a National Budget Portal, which also failed to materialize due to lack of evidence from the Budget Office.
The document outlined:
“The proposed change is to cancel $10.4 million—$9.5 million from PBCs that will not be achieved and $0.9 million uncommitted from Technical Assistance.”
This marks the second adjustment to the project, following a $22 million cancellation in June 2024, reducing the original $125 million facility to $103 million. With this latest cut, the total now stands at $92.6 million.
The Fiscal Governance and Institutions Project, launched in 2018 and operational since 2019, aimed to enhance public finance credibility through improved revenue systems, transparency, and data governance.
Despite falling short on key deliverables, the project made progress in certain areas. Non-oil revenue collection rose significantly—153% of the budgeted target in 2024, compared to 64.9% in 2018. This boost is credited to exchange rate unification, upgrades in tax administration via TaxProMax, and automation of remittances across ministries and agencies.
The project also exceeded expectations in publishing reconciled economic and fiscal data, releasing 10 datasets against a target of six.
However, capital expenditure execution remained sluggish at 50%, below the 65% goal, and project monitoring and evaluation received a rating of moderately unsatisfactory.
Other highlights included:
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The Electronic Register of Beneficial Owners, now covering 40% of registered businesses.
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A National Asset Registry and financial reports published by the Ministry of Finance Incorporated.
In total, the project is expected to disburse $96.04 million, which represents 93% of the revised $103 million allocation.
