World Bank Slashes Nigeria’s Loan Requests Over Unmet Conditions

• The Nigerian government is set to forfeit $4 million from a World Bank loan for failing to meet key auditing standards
• The facility is part of the $103 million loan request for a public financial management scheme financed through a credit facility
• A World Bank document dated June 2025 showed that the revenue audit was adjudged as not achieved, as it failed international auditing standards

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

The Nigerian government may lose $4 million from a World Bank loan after failing to meet auditing standards on essential revenue reforms covering the Federal Inland Revenue Service and the Nigeria Customs Service.

The loan is part of the $103 million Fiscal Governance and Institutions Project, a public financial management initiative funded via a credit facility from the bank’s International Development Association (IDA).

Nigeria fails key auditing standards

The World Bank’s restructuring paper, dated June 2025, disclosed that the revenue assurance audit, which covers the Federal Inland Revenue Service (FIRS) and Customs, was adjudged as not achieved because the reports failed international auditing standards.

According to the World Bank document, the intermediate results to be implemented by the Office of the Auditor-General of the Federation were seen as not achieved by the independent verification agent, as they did not meet international auditing standards.

Punch reports that the failed audit was of the 10 performance-based conditions under the project that the government could not deliver before June 30, 2025.

FG to forfeit $4 million World Bank loan

Due to this, the Federal Ministry of Finance requested the cancellation of $10.4 million in project funds.

The World Bank document disclosed that the ministry has requested cancellation of $0.9 million in unused funds for technical assistance and $9.5 million allocated to 10 conditions, which will not be met by the end of the project on June 30, 2025.

An analysis shows that $4.5 million was connected to the uncompleted Revenue Assurance and Billing System, while $1 million was allocated to National Budget Portal development.

The document showed that Nigeria's budget office did not submit any evidence of achievement. Also, $0.9 million in technical aid funding was uncommitted and cancelled.

Reports say the latest adjustment follows an earlier one in June last year, when $22 million was removed from the original $125 million envelope, bringing the project down to $103 million.

Nigeria to get $92.6m loan

The new cancellation brings the total funding to $92.6 million.

The project, which was approved in June 2018 and became effective in May 2019, was designed to improve the credibility of public finance and national data via reforms in revenue administration, budget transparency, and data systems.

Despite the government missing important milestones, the project recorded some progress in other aspects, including revenue performance.

The global lender said non-oil revenue performance was about 153% of the budgeted target in 2024, from a baseline of 64.9% in 2023.

The World Bank said the increase was due to the exchange rate reform, enhanced tax administration via the TaxProMax system, and reforms that increased remittances from ministries and agencies.

FG meets some World Bank conditions

Additionally, the government surpassed expectations in publishing reconciled economic and fiscal datasets, achieving 10 publications from the projected six.

Per the records, capital expenditure execution remains below par at 50%, short of the 65% target, while project monitoring and evaluation were scored as unsatisfactory.

The final disbursement of the project is put at $96.04 million, representing 93% of the pre-cancellation sum of $103 million.

Nigeria, other African countries with highest overall debt to China

Legit.ng earlier reported that in the past 20 years, China’s fiscal engagement with Africa has grown immensely, especially in the areas of infrastructure funding.

The loans have helped to build critical infrastructure such as roads, railways, and power plants in several African countries.

However, Nigeria ranked high after data showed that it was among the African countries with the highest debt obligations to China.

Proofreading by Kola Muhammed, copy editor at Legit.ng.

Source: Legit.ng