The Federal Government has accused the Central Bank of Nigeria (CBN) of mismanaging N2.73 trillion in interest payments from Ways and Means advances, raising concerns about irregularities in the use of public funds.
This was revealed in the Federal Government’s consolidated financial statement for the year ending December 31, 2021, submitted by the Auditor-General, Shaakaar Chira, to the National Assembly. The report, dated July 31, 2024, highlighted that the CBN retained interest charges from Ways and Means advances for its own benefit instead of remitting them to the Consolidated Revenue Fund (CRF).
The Ways and Means facility is a temporary loan mechanism provided by the CBN to fund government budget deficits. 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 and other overdraft components.
The Auditor-General’s report pointed out that the Constitution and Financial Regulations prohibit unauthorised withdrawals from the CRF. Section 80(2) of the Constitution mandates that no funds shall be withdrawn without approval via an appropriation act, while the Financial Regulations of 2009 forbid overdrafts.
N9.41 trillion was attributed to reconciled domestic debt service; N4.45 trillion was drawn for Ways and Means advances. Other components included Paris Club refunds and deferred state loan deductions.
The Federal Government has demanded that the CBN refund the N2.73 trillion interest charges, stating that these funds were not derived from the bank’s balance sheet or any syndicated loan facility. The government also insisted that these charges should not be securitised, unlike other overdraft components.
The Auditor-General recommended that the Accountant-General justify the N17.1 trillion overdraft to the National Assembly and ensure sanctions for irregular payments from public funds. The report attributed the irregularities to weak internal controls in the Office of the Accountant-General, warning that such practices expose the government to unnecessary fiscal burdens.
