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The federal government is expected to lose $4 million from a World Bank loan after failing to meet auditing standards on a key revenue reform covering the Federal Inland Revenue Service and the Nigeria Customs Service.
The fund formed part of the $103m Fiscal Governance and Institutions Project, a public financial management initiative financed through a credit facility from the International Development Association, reports The PUNCH.
According to the World Bank’s restructuring paper dated June 2025, the revenue assurance audit covering the FIRS and Customs for the 2018 to 2021 financial years was assessed as not achieved because the reports submitted did not meet international auditing standards.
A World Bank document obtained by The PUNCH on Sunday read, “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 one of ten performance-based conditions under the project that the government could not deliver before the closing date of June 30, 2025. As a result, the Federal Ministry of Finance formally requested the cancellation of $10.4m 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 read.
The breakdown further shows that $4.5m was tied to the uncompleted Revenue Assurance and Billing System, while $1m was allocated to the development of a National Budget Portal.
According to the document, the Budget Office of the Federation, which was responsible for the portal, did not submit any evidence of achievement. In addition, $0.9m in technical assistance funding was left uncommitted and has also been cancelled.
The document read, “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 latest adjustment follows an earlier restructuring in June 2024, when $22m was dropped from the original $125m envelope, bringing the project down to $103m. With the new cancellation, the total funding now stands at $92.6m.
The Fiscal Governance and Institutions Project, approved in June 2018 and effective from May 2019, was designed to improve the credibility of public finance and national statistics through reforms in revenue administration, budget transparency, and data systems.
Although the government missed key targets, the project recorded progress in other areas, including revenue performance. According to the World Bank, non-oil revenue outturn was 153 per cent of the budgeted target in 2024, up from a baseline of 64.9 per cent in 2018.
The bank attributed the increase to the unification of Nigeria’s exchange rate, improved tax administration via the TaxProMax system, and reforms that automated revenue remittances from ministries and agencies.
In addition, the government exceeded expectations in the publication of reconciled economic and fiscal datasets, achieving 10 publications against the project target of six.
However, capital expenditure execution remains below expectations at 50 per cent, short of the 65 per cent target, while project monitoring and evaluation were rated as moderately unsatisfactory.
Other areas of progress include the launch of the Electronic Register of Beneficial Owners by the Corporate Affairs Commission, which now covers about 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 on the project is projected at $96.04m, which represents 93 per cent of the pre-cancellation total of $103m.
