The Federal Government has accused the Central Bank of Nigeria (CBN) of misappropriating N2.73 trillion in interest payments from the controversial Ways and Means advances, raising concerns about irregularities in the management of public funds.
This revelation was contained in the Federal Government’s consolidated financial statement for the year ended December 31, 2021.
The report, referenced AuGF/AR.2021/01 and dated July 31, 2024, was submitted to the National Assembly by the Auditor-General of the Federation, Shaakaar Chira.
At the centre of the controversy is the Ways and Means facility, a loan mechanism designed to bridge budget deficits.
According to the report, the CBN retained interest charges of N2.73 trillion, allegedly using the funds “for its sole benefit” instead of remitting them to the Consolidated Revenue Fund (CRF).
The CRF’s cash balance, as of December 31, 2021, was in a deficit of N17.1 trillion, including N4.4 trillion in Ways and Means advances.
The 1999 Constitution (as amended) and the Financial Regulations of 2009 strictly prohibit unauthorised withdrawals from the CRF. Section 80(2) of the Constitution stipulates that no funds shall be withdrawn without approval through an appropriation or supplementary act.
Similarly, paragraph 710 of the Financial Regulations bars overdrafts and mandates the refund of any interest incurred.
However, the audit report noted that the CRF and four other government entities had overdrawn accounts totalling N17.1 trillion without appropriate approvals.
These include N9.41 trillion for reconciled domestic debt service, N4.45 trillion in Ways and Means withdrawals, and N483.97 billion for Paris Club loan refunds.
“The CRF negative balance of (N17,105,111,709,523.00) as of 31st December 2021 included actual Ways and Means advance of N4.4 trillion taken by the Government and interest charged on it for the sole use of CBN,” the report stated.
The Federal Government alleged that the CBN treated the Ways and Means advances as though they were loans from its balance sheet or syndicated facilities.
It argued that the N2.73 trillion interest charged was misappropriated and demanded its immediate refund.
“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,” the report read.
The government also instructed that the interest charges should not be securitised, unlike other components of the overdraft being managed by the Debt Management Office.
The Auditor-General recommended that the Accountant-General of the Federation justify the N17.1 trillion overdraft before the Public Accounts Committees of the National Assembly.
He also urged the enforcement of sanctions outlined in paragraph 3106 of the Financial Regulations for irregular payments from public funds.
The report blamed the irregularities on weak internal controls within the Office of the Accountant-General of the Federation, describing the situation as a significant risk to public finance.
It warned that unauthorised expenditures and avoidable interest payments posed unnecessary fiscal burdens on the government.
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