The World Bank has uncovered $32 million in unaccounted funds linked to a Nigerian water project.
The revelation was made in the recently released Fiscal Year 2024 Sanctions System Annual Report by the global financial institution.
According to the report, the missing funds were earmarked to improve water infrastructure in Nigeria but were not properly accounted for, raising serious concerns about financial oversight.
“INT followed up on risks identified regarding a project in Nigeria’s water sector and flagged to operations the risk, which was associated with $32 million of unaccounted funds,” the report stated.
The missing $32 million has been partially traced, with recommendations for recovery already underway.
Of this amount, the Central Bank of Nigeria (CBN) has been asked to reimburse $22 million.
Another $6 million remains in a project account to cover anticipated operational expenses.
The World Bank has partnered with Nigerian officials to secure the remaining funds and safeguard the integrity of the project.
The World Bank has hinted that the missing money might have been misappropriated.
The bank has engaged key stakeholders, including Nigeria’s Task Team Leader, Operations Manager, and Financial Management Specialist, to minimize further risks.
The report emphasized the need for urgent action to prevent embezzlement and ensure that ongoing projects deliver on their objectives.
“INT met with the Task Team Leader, Operations Manager, Program Leader, and Financial Management Specialist to identify steps to reduce the risk of embezzlement,” the World Bank noted.
While the report did not specify which project was affected, it shed light on a recurring pattern of issues in Nigeria’s water sector.
In 2021, the World Bank committed $875 million to improve water and sanitation in Nigerian cities and rural areas.
However, the project’s performance halfway through its six-year timeline was rated “moderately unsatisfactory” due to poor management and slow progress.
This is not the first time Nigeria’s water sector has been entangled in controversy.
The National Urban Water Sector Reform Project (NUWSRP), implemented between 2004 and 2014, also faced challenges.
The first phase of the project used $202 million but was rated poorly in 2017 because of ineffective state-level management.
A World Bank-sponsored independent review revealed slow reforms and a lack of accountability by state water agencies (SWAs).
“Reforms progressed slowly and there were often mixed signals communicated within states regarding the need to achieve cost recovery… SWAs remained dependent on state governments for financing and could not achieve self-sufficiency,” the review stated.
The second phase of the project, funded with $210 million, was marred by corruption.
In 2016, a contractor was flagged and barred for submitting fake certificates during the project.
The third phase of NUWSRP, which began in 2014 with $250 million in funding, faced similar difficulties.
Weak leadership, slow reforms, and complex financing structures continued to hinder progress, earning the project low ratings.
Despite massive investments in the water sector, accountability and operational efficiency remain elusive in Nigeria.
Experts argue that the recurring issues in Nigeria’s water projects underscore the need for better oversight and structural reforms.
Without swift and decisive action, funds meant for vital infrastructure could continue to disappear without achieving tangible results.
The World Bank’s latest findings highlight the importance of financial transparency and accountability in public sector projects.
