Nigeria Loses $4m in World Bank Funding Over Audit Failures at Key Agencies
Nigeria is set to lose $4 million in financial support from the World Bank after failing to meet international auditing standards tied to a key fiscal reform program.
The loss comes amid inadequacies in the revenue assurance audit reports submitted by two major government agencies, which include the Federal Inland Revenue Service (FIRS) and the Nigeria Customs Service, covering financial years 2018 to 2021.
This penalty is part of the broader $103 million Fiscal Governance and Institutions Project, a public financial management initiative financed through a credit facility from the World Bank’s International Development Association (IDA).
The program was designed to improve transparency, accountability, and efficiency in Nigeria’s public sector, with specific reforms tied to performance-based disbursements. Among them was a target to conduct revenue assurance audits of FIRS and Customs in compliance with international best practices.
However, a restructuring paper released by the World Bank in June 2025 revealed that this milestone was “not achieved.”
The failure is a blow to the federal government’s broader economic reform agenda, especially at a time when Nigeria is grappling with revenue shortfalls, high debt service costs, and an urgent need to improve fiscal governance.
Nigeria’s failure to meet key auditing standards has also hindered its economic reform agenda, particularly amid revenue shortfalls and high debt obligations.
However, the report noted that progress has been made in non-oil revenue, exceeding targets with a 153% outturn in 2024, up from 64.9% in 2018.
The Nigerian government also published 10 validated economic data sets, surpassing expectations.
Despite challenges in capital expenditure and project monitoring, reforms have enhanced transparency, including the launch of an Electronic Register of Beneficial Owners and a National Asset Registry.
After a $4 million deduction for unmet audit criteria, the final disbursement under the Fiscal Governance and Institutions Project will be $96.04 million, 93% of the original allocation.
