Nigeria is set to lose $4 million in financial support from the World Bank Group over the fiscal authorities’ failure to comply with international auditing standards tied to a key fiscal reform programme.
The latest restructuring paper released by the World Bank in June 2025 on the programme, indicated that the non-compliance findings were largely due to inadequacies in the revenue assurance audit reports submitted by the Federal Inland Revenue Service (FIRS) and the Nigeria Customs Service (NCS), covering financial years 2018 to 2021.
The penalty on the audit flaws in the revenue agencies is part of the $103 million Fiscal Governance and Institutions Project (FGIP), a public financial management initiative financed through a credit facility from the Bretton Woods institution’s International Development Association (IDA).
By its design, the programme aims to improve transparency, accountability, and efficiency in Nigeria’s public sector, with specific reforms tied to performance-based disbursements, including a target to conduct revenue assurance audits of FIRS and NCS in compliance with international best practices.
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However, the just published restructuring paper by the World Bank in June 2025 indicated that the revenue agencies failed to comply with the best practices during the period under review.
Specifically, the report showed that the audit submissions by the two key revenue agencies of the Nigerian government did not meet the required international auditing standards, thereby disqualifying Nigeria from accessing the $4 million linked to that particular result.
Despite this negative scorecard, the report reflected that Nigeria had improved in non-oil revenue accruals, surpassing budgetary targets by 153% in 2024, up from 64.9% in 2018.
This is complemented with the publication by the Nigerian government of 10 validated economic data sets, surpassing expectations.
In addition, the report’s findings showed that in spite of the challenges faced by the government in capital expenditure and project monitoring, ongoing reforms had enhanced transparency, including the launch of an Electronic Register of Beneficial Owners and a National Asset Registry.
A further analysis of the report’s data revealed that after a $4 million deduction for unmet audit criteria, the final disbursement under the FGIP would be $96.04 million, 93% of the initial allocation for the project.
Analysts believe that the failure of the FIRS and NCS to fully comply with the international auditing standards has the potential of undermining the Federal Government’s ongoing broader economic reform agenda, especially at a time when it is grappling with revenue shortfalls, high debt service costs, and the imperative of improving fiscal governance.
