Nigeria has lost $4 million in World Bank loan funding after failing to meet key audit benchmarks on revenue reforms.
The missed targets affected tax and customs systems, highlighting Nigeria’s ongoing struggle to meet global standards in public finance management.
The World Bank has slashed $4 million from Nigeria’s $103 million loan request after the federal government failed to meet critical auditing conditions. The withheld funds were tied to revenue assurance reforms covering the Federal Inland Revenue Service (FIRS) and the Nigeria Customs Service (NCS), which fell short of international auditing standards.
Failed conditions trigger funding cancellation
A June 2025 World Bank restructuring document revealed that Nigeria missed 10 performance-based conditions under the Fiscal Governance and Institutions Project, leading to
- $10.4 million total cancellation request by Nigeria’s Finance Ministry
- $4.5 million cut linked to incomplete Revenue Assurance & Billing System
- $1 million removed due to stalled National Budget Portal development
- $0.9 million in unused technical assistance funds scrapped
This follows an earlier $22 million reduction in June 2024, shrinking the loan from $125 million to $92.6 million.
Why did Nigeria fail the audit?
The Office of the Auditor-General of the Federation submitted reports that did not meet global benchmarks, per an independent verification agent. Key gaps included:
- Weak revenue tracking systems
- Delayed budget execution (only 50% vs. 65% target)
- Unsatisfactory project monitoring
Silver linings: Where Nigeria made progress
Despite setbacks, the Tinubu administration achieved 153% non-oil revenue performance in 2024 (up from 64.9% in 2023) driven by:
- TaxProMax reforms
- Agencies’ improved remittances
- Exchange rate adjustments
Broader implications
- China Debt Concerns: Nigeria remains among Africa’s top debtors to China, raising sustainability debates.
- Reform Urgency: The cuts spotlight Nigeria’s struggle to modernize public finance systems amid economic pressures.
Final disbursement status
The World Bank has released $96.04 million (93%) of the loan, leaving Nigeria to forfeit the rest. The project, approved in 2018 to boost transparency and revenue governance, closes on June 30, 2025.
While Nigeria shows gains in tax administration, its audit failures cost millions in funding, a wake-up call for stronger fiscal accountability.
