The Federal Government has accused the Central Bank of Nigeria (CBN) of misappropriating N2.73 trillion in interest payments from Ways and Means advances, raising serious concerns over irregularities in the management of government funds. This allegation was disclosed in the consolidated financial statement of the Federal Government for the year ended December 31, 2021, submitted to the National Assembly by the Auditor-General, Shaakaar Chira, on July 31, 2024.
The Ways and Means facility, a temporary loan mechanism provided by the CBN to the government to finance budget deficits, lies at the center of the controversy. According to the report, the Federal Government claimed that the CBN retained interest charges amounting to N2.73 trillion, using the funds for its sole benefit rather than returning them to the Consolidated Revenue Fund (CRF).
As of December 31, 2021, the CRF had a negative cash balance of N17.1 trillion, which included N4.4 trillion in Ways and Means advances. The Constitution of Nigeria and the Financial Regulations of 2009 strictly prohibit unauthorized withdrawals from the CRF or overdrawing government accounts.
The report revealed that the CRF and four other ministries, departments, and agencies had overdrawn accounts totaling N17.1 trillion, a figure that lacked appropriate approvals or documentation. The breakdown included N9.41 trillion for reconciled domestic debt service, N4.45 trillion for Ways and Means withdrawals, and N483.97 billion for Paris Club loan refunds.
In its response, the Federal Government stated that the CBN had mismanaged the Ways and Means facility, treating the funds as though they were loans from its balance sheet or from a syndicated group of lenders. The government called for the immediate refund of the N2.73 trillion interest retained by the CBN.
The audit report noted that the interest charged on Ways and Means by the CBN was misappropriated for its sole use, emphasizing that the actual Ways and Means was not a facility from CBN’s funds or a syndicated facility. The government demanded that the CBN refund the N2.73 trillion interest to the CRF.
The Auditor-General also recommended that the Accountant-General of the Federation justify the N17.1 trillion overdraft to the Public Accounts Committees of the National Assembly and ensure that sanctions for irregular payments from public funds are applied. The report attributed the irregularities to weaknesses in the internal control processes at the Office of the Accountant-General, describing the situation as a significant risk to public finance.
