Abuja, Nigeria – The Central Bank of Nigeria (CBN) has been accused of misappropriating N2.73 trillion in interest payments from Ways and Means advances, raising alarm over financial mismanagement in the handling of government funds.
The allegation was detailed in the Federal Government’s consolidated financial statement for the year ended December 31, 2021. The report, submitted to the National Assembly by the Auditor-General of the Federation, Shaakaar Chira, is referenced AuGF/AR.2021/01 and dated July 31, 2024.
At the center of the controversy is the Ways and Means facility, a loan mechanism provided by the CBN to the Federal Government to address budget deficits. According to the Auditor-General’s report, the CBN retained N2.73tn in interest charges from these advances for its own benefit, instead of transferring the funds to the Consolidated Revenue Fund (CRF).
Irregularities in Government Finances
The report disclosed that the CRF had a negative cash balance of N17.1tn as of December 31, 2021. This includes N4.4tn in Ways and Means advances. The Nigerian Constitution and Financial Regulations prohibit unauthorised withdrawals or overdrawn government accounts, yet the CRF and four other government entities reportedly overran accounts totalling N17.1tn without requisite approvals.
Breakdowns of the negative balance include:
- N9.41tn for reconciled domestic debt service,
- N4.45tn for Ways and Means withdrawals,
- N483.97bn for Paris Club loan refunds,
- Deferred state loan deductions and CPV coupon payments.
Legal and Financial Breaches
Citing Section 80(2) of the 1999 Constitution and paragraph 710 of the 2009 Financial Regulations, the Auditor-General criticised the unauthorised overdrafts and retention of interest charges. The regulations stipulate that overdraft interests must be refunded and that withdrawals require legislative approval.
The report read:
“The CRF negative balance of (N17,105,111,709,523.00) as at 31st December 2021 included actual Ways and Means advance of N4.4 trillion taken by Government and interest charged on it for the sole use of CBN as though the Ways and Means was a loan from CBN funds or any syndicated group of lenders.”
The Auditor-General further noted that the CBN treated the Ways and Means facility as though the funds were from its own balance sheet or external lenders, which was inaccurate.
Government Demands Refund
The Federal Government, in response, accused the apex bank of mismanaging the facility and demanded the immediate refund of the N2.73tn interest to the CRF. It also rejected the securitisation of these interest payments, differentiating them from other overdrafts managed by the Debt Management Office.
The report concluded:
“CBN must therefore refund to the Federal Government of Nigeria the interest of N2.73 trillion it cornered for its sole use as of 31st December 2021.”
Call for Accountability
The Auditor-General has called upon the Accountant-General of the Federation to provide justification for the N17.1 trillion overdraft to the Public Accounts Committees of the National Assembly. The report called for sanctions, as outlined in paragraph 3106 of the Financial Regulations, for any irregular payments from public funds.
Highlighting weaknesses in internal control processes at the Office of the Accountant-General, the report warned that such practices posed significant risks to public finances, burdening the government with unnecessary fiscal liabilities.
The allegations and recommendations are expected to generate intense scrutiny in the coming weeks as the National Assembly reviews the report.
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