A damning audit report has revealed that the Central Bank of Nigeria (CBN) misappropriated a staggering N2.73 trillion in public funds, sparking outrage and calls for accountability. The mismanagement centers around the CBN’s handling of the Ways and Means Advances, a government borrowing mechanism that saw over N4.4 trillion allocated to the federal government. The revelations, which were part of the 2021 financial audit, have raised serious questions about the transparency and integrity of the financial institutions involved.
The audit, conducted by the Office of the Auditor General for the Federation (AuGF), and released on December 29, 2024, has shaken the foundation of Nigeria’s financial governance. According to the report, CBN treated the interest charged on these advances as though it were a loan from its own funds or from external lenders. However, the funds were not borrowed from CBN’s balance sheet or any syndicated loan arrangements.
The Accountant General of the Federation (AGF) responded to the report, asserting that the interest payments on the Ways and Means Advances, totaling over N2.7 trillion, were diverted for the sole use of the CBN. “The interest charged on Ways and Means by CBN was misappropriated by CBN for its sole use, whereas the actual Ways and Means were not a facility from its funds or balance sheet, nor was it a syndicated facility,” the AGF stated.
The scandalous findings are bound to ignite political and legal ramifications, particularly since the misappropriated funds are public resources that were intended for government use. The Auditor General’s report indicated that this amount, which should have been used for national development, was improperly handled, exacerbating the financial imbalance within the nation’s Consolidated Revenue Fund (CRF).
The Role of the Ways and Means Advances
The Ways and Means facility is meant to provide temporary funding to the federal government to cover short-term deficits. However, the audit reveals a systemic failure in how the funds were processed and handled. While the Ways and Means mechanism is often utilized in fiscal crises, the report highlights that the interest accruing on the advances was erroneously misdirected, leading to an overdrawn balance of over N17 trillion by the end of 2021.
“The CRF negative balance as of December 31, 2021, included the actual Ways and Means advance of N4.4 trillion taken by the government and the interest charged on it,” the AGF explained. This misallocation of funds is said to have severely undermined the country’s fiscal health, with far-reaching consequences for national budgeting and debt management.
Further complicating the matter is the claim that the interest charged on the funds was securitized, or repackaged, in a way that could have hidden its misappropriation. The AGF has called for the full refund of the misappropriated amount back into the CRF to restore the integrity of government finances.
Mismanagement of National Debt
In addition to the mismanagement of the Ways and Means advances, the audit also raised concerns about the country’s total debt obligations. The total external and domestic debt of Nigeria’s 36 states stood at over N6.8 trillion by the end of 2021, with significant portions of that debt guaranteed by the federal government. However, these state-level borrowings were not adequately disclosed in the government’s consolidated financial statements, a major oversight.
The audit also discovered that 235 Ministries, Departments, and Agencies (MDAs) exceeded their budgeted overheads by more than N116 billion, with no clear justification or evidence of approval from the National Assembly. “There was no evidence such as approvals or supporting documents to justify the overdrawn accounts,” the report stated, highlighting severe lapses in financial oversight and the lack of transparency.
Further scrutiny revealed that some MDAs had incurred substantial expenditures without any approved budget. For instance, 44 agencies were found to have spent over N92 billion on employee benefits without proper appropriations. The National Pension Commission alone accounted for over N56 billion of this amount. These irregularities point to systemic weaknesses in government financial management and call into question the effectiveness of internal controls.
Call for Accountability and Transparency
The scale of mismanagement revealed in the audit has drawn widespread condemnation from both political and civil society groups. Financial analysts and political commentators are calling for immediate reforms in the way government agencies handle public funds.
“CBN must refund the misappropriated interest of N2.73 trillion to the federal government to restore fiscal responsibility,” said Adebayo Aluko, an economic expert at the Nigerian Institute for Fiscal Studies. “This is not just a matter of financial mismanagement; it’s a violation of public trust that needs to be addressed with the utmost urgency.”
The national assembly has also joined the call for accountability. Senator Biodun Olujimi, a member of the Senate Committee on Finance, expressed concern over the revelations. “This report is a wake-up call for all of us. We cannot continue to allow such levels of mismanagement in the public sector. The CBN and other implicated agencies must be held accountable.”
The Road to Recovery
Despite the shocking nature of the findings, there is hope that this audit could serve as the catalyst for long-needed reforms in Nigeria’s financial system. Experts suggest that a full investigation must be conducted, and any officials found culpable must face appropriate consequences. The Auditor General’s office, for its part, has recommended the implementation of stronger oversight mechanisms to prevent such occurrences in the future.
Moreover, the CBN’s role in national fiscal management must be reviewed to ensure that it is not overstepping its mandate. “There should be a clear separation between the functions of the CBN and other financial institutions,” said Professor Ahmed Alhaji, an expert on Nigerian financial policy. “It is crucial that CBN returns the misappropriated funds and works transparently moving forward.”
