The Nigerian government is poised to forfeit $10.4 million from a World Bank credit facility, part of the $103 million Fiscal Governance and Institutions Project (FGIP). This public financial management initiative, financed through the International Development Association (IDA), aims to improve the credibility of public finance and national data. The forfeiture stems from the government's inability to meet several performance-based conditions before the project's closure on June 30, 2025.

The Federal Ministry of Finance requested the cancellation of these funds, which include $0.9 million in unused technical assistance funds and $9.5 million allocated to ten performance-based conditions that will not be achieved. Key among the failures is a $4 million audit covering the Federal Inland Revenue Service (FIRS) and the Nigeria Customs Service (NCS), which was deemed substandard as the reports did not meet requisite international auditing standards according to an independent verification agent.

Further contributing to the forfeiture is the non-deployment of a National Budget Portal, an initiative with a $1 million allocation. The Budget Office of the Federation reportedly did not submit evidence of achievement for this intermediate result. Additionally, the implementation of the Revenue Assurance and Billing System (RABS), allocated $4.5 million, faced significant delays. Issues included incomplete setup of Treasury Single Account (TSA) sub-accounts for foreign earned revenues by Federal Government Owned Entities (FGOEs), lack of automatic split and transfer of these revenues to the Consolidated Revenue Fund (CRF), contract management issues in expanding the RABS implementation consortium, and pending finalization of an indemnity letter requested by the Central Bank of Nigeria (CBN). Consequently, RABS implementation is now expected to be completed in August 2025, after the FGIP closes.

The FGIP was approved in June 2018 and became effective in May 2019, with the goal of enacting reforms in revenue administration, budget transparency, and data systems. The project's original envelope was $125 million, which was previously reduced to $103 million in June 2024. The current cancellation of $10.4 million will further reduce the total funding to $92.6 million.

Despite these setbacks, the World Bank noted progress in other aspects of the project. Non-oil revenue performance was reported at 153% of the budgeted target in 2024, a significant increase from the 64.9% baseline in 2018. This improvement was attributed to Nigeria’s exchange rate unification policy, enhanced tax administration via the TaxProMax system, and reforms automating revenue remittances from ministries and agencies. The country also surpassed expectations in publishing reconciled economic and fiscal datasets, achieving 10 publications against a target of six.

Other areas of progress include the launch of an electronic register of beneficial owners by the Corporate Affairs Commission (CAC), covering approximately 40% of registered businesses, the publication of a national asset registry, and financial reports by the Ministry of Finance Incorporated (MOFI). However, capital expenditure execution remains below par at 50%, short of the 65% target. Project monitoring and evaluation were rated as “moderately unsatisfactory” by the global lender.

The final disbursement for the FGIP is estimated at $96.04 million, representing 93% of the pre-cancellation total of $103 million.