The federal government is expected to forfeit $10 million
from a World Bank credit due to audit shortcomings, delays in launching a
national budget portal, and slow implementation of a revenue assurance system.
The fund is part of the $103 million fiscal governance and
institutions project (FGIP), a public financial management initiative financed
through a credit facility from the International Development Association, a
lending arm of the World Bank.
Details of the borrowing are contained in the World Bank’s
June 2025 restructuring paper addressed to the federal ministry of finance
(FMF).
The fund is scheduled to close on June 30.
“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 reads.
Among the cancelled items is a $4 million audit of key
revenue-generating agencies — the Federal Inland Revenue Service (FIRS) and the
Nigeria Customs Service (NCS) — which was deemed substandard by the global
bank.
“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,” the World Bank said.
“Deployment of a National Budget Portal to publish the
capital budgets of the FGN and at least 20 states by the BOF, with an
allocation of $1 million. The BOF did not submit evidence of achievement for
the IR.
“Implementation of the Revenue Assurance and Billing System
(RABS), with an allocation of $4.5 million. Two IRs – 2.5 and 2.6 – were
submitted for verification but were assessed in IVA report 6 as not achieved.
“This was because there was evidence for only 27 out of the
55 FGOEs setting up a Treasury Single Account (TSA) sub-account for foreign
earned revenues, and there was no automatic split and transfer of foreign
earned revenues to the Consolidated Revenue Fund (CRF) as required.
“The remaining IRs 2.7-2.9 will not be achieved before the
Project closes because of delays due to: (i) Contract management issues: the
FMF is in the process of expanding the RABS implementation consortium to
include another vendor, (ii) pending finalization of the indemnity letter
requested by the Central Bank of Nigeria (CBN) from the FMF to ensure that the
CBN is not liable for any potential errors arising from the automatic transfers
of funds from the TSA sub-accounts of FGOEs to the CRF.
“Given these delays, RABS implementation is expected to be
completed in August 2025, which will be after FGIP closes.”
‘PROJECT SHOWS PROGRESS IN REVENUE PERFORMANCE, DATA
TRANSPARENCY’
According to the document, despite missed targets by the
federal government, the FGIP recorded progress in other areas, including
revenue performance.
The World Bank report said non-oil revenue outturn was 153
percent of the budgeted target in 2024, up from a baseline of 64.9 percent in
2018.
The bank attributed the increase to Nigeria’s exchange rate
unification policy, improved tax administration via the TaxProMax system, and
reforms that automated revenue remittances from ministries and agencies.
In addition, the report said the capital expenditure
execution remains below expectations at 50 percent, short of the 65 percent
target.
The World Bank said the country exceeded expectations in
publishing reconciled economic and fiscal datasets, achieving 10 publications
against the project target of six.
However, project monitoring and evaluation were rated as
“moderately unsatisfactory” by the global bank.
Other areas of progress include the launch of the electronic
register of beneficial owners by the Corporate Affairs Commission (CAC), which
now covers about 40 percent of registered businesses, the publication of a
national asset registry, and financial reports by the Ministry of Finance
Incorporated (MOFI).
The World Bank said the final disbursement on the project is
estimated at $96.04 million, which represents 93 percent of the
pre-cancellation total of $103 million.
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