With just weeks to the project deadline, the federal government (FG) is set to forfeit $10 million from a World Bank credit facility, marking a significant stumble in the country’s ongoing fiscal reform efforts.
The unclaimed funds, tied to performance-based milestones, will be lost not for lack of availability but due to critical institutional delays, substandard audits and incomplete policy rollouts.
EDITOR’S PICKS
This forfeiture stems from the $103 million Fiscal Governance and Institutions Project (FGIP), a World Bank-backed initiative launched to strengthen Nigeria’s public financial management. Financed through a credit from the International Development Association (IDA), the FGIP aimed to improve budget transparency, audit integrity and revenue assurance in Africa’s largest economy.
According to the World Bank’s June 2025 restructuring report, $10.4 million in unused or underperforming allocations will be cancelled at the request of the federal ministry of finance (FMF). The project officially closes on June 30.
“The FMF has requested cancellation of $0.9 million of unused funds for Technical Assistance (TA) and $9.5 million, which is the amount allocated to 10 performance-based conditions (PBCs) which will not be achieved by the close of the project on June 30, 2025,” the document reads.
In this report, EKO HOT BLOG breaks down what Nigeria is losing in the $10 million loan forfeiture and what is causing the losses.
A Breakdown of the Losses
Among the forfeited items is a $4 million allocation for auditing Nigeria’s top revenue-generating agencies, the Federal Inland Revenue Service (FIRS) and the Nigeria Customs Service (NCS). However, the reports submitted to the World Bank for verification “did not meet the requisite international auditing standards,” according to the Independent Verification Agent (IVA), and were therefore rejected.
Similarly, $1 million earmarked for the deployment of a National Budget Portal to publish capital budgets for the federal government and at least 20 states will be returned. The Budget Office of the Federation (BOF), the implementing agency, reportedly failed to submit credible evidence of progress.
The largest portion of the forfeiture, $4.5 million, was linked to the Revenue Assurance and Billing System (RABS), a key tool for tracking foreign-earned revenues and automatically remitting them into the Consolidated Revenue Fund (CRF).
Although partial submissions were made, the IVA found that only 27 out of 55 Federal Government-Owned Enterprises (FGOEs) had established the necessary sub-accounts, and the system lacked the required automatic transfer functionality.
Delays were compounded by contract management issues and pending legal clarifications, including an indemnity letter requested by the Central Bank of Nigeria (CBN) to avoid liability for errors in fund transfers.
The bottom line is that key reform targets will not be met by 30 June, and Nigeria will leave money on the table.
The Bigger Picture: Progress and Pitfalls
Not all was lost. The FGIP recorded progress in several critical areas, according to the World Bank.
Nigeria’s non-oil revenue performance was a standout, reaching 153 per cent of its 2024 target, more than double the 64.9 per cent baseline set in 2018. This improvement was driven by a mix of policy reforms: the unification of the country’s exchange rate, the implementation of the TaxProMax system and enhanced automation of government revenue remittances.
The government also exceeded targets on data transparency, publishing 10 reconciled economic and fiscal datasets, four more than required. Other achievements included the launch of a national asset registry and an electronic register of beneficial ownership, now covering 40 per cent of registered Nigerian businesses.
Still, the shortcomings in core oversight mechanisms such as audits, revenue tracking and budget transparency have raised serious questions about Nigeria’s capacity to implement institutional reforms, even when foreign financing is on the line.
What the Forfeiture Means
For a country battling chronic revenue shortfalls, losing $10 million in external financing is no small matter. However, the greater concern is what the forfeiture reveals about the deeper structural issues undermining reform.
Moreover, the missed targets highlight ongoing coordination failures between key institutions, from the Ministry of Finance and the Budget Office to the Central Bank and implementing vendors.
FURTHER READING
With the RABS system now expected to be completed by August, two months after the project’s closure, the federal government’s reform machinery appears out of sync with donor timelines and accountability frameworks.
Philip Ibitoye is a Special Correspondent with EKO HOT BLOG. Click here to find daily analysis and insight on trending issues in Lagos and other parts of Nigeria.
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