The Federal Government has raised serious concerns over the management of public funds, accusing the Central Bank of Nigeria (CBN) of misappropriating N2.73 trillion in interest payments related to the Ways and Means advances. This allegation was highlighted in the Auditor-General’s consolidated financial statement for the year ended December 31, 2021, submitted to the National Assembly.
The Ways and Means facility is a temporary loan mechanism provided by the CBN to finance government budget deficits. However, the report claims that the CBN retained interest charges amounting to N2.73 trillion, using the funds for its sole benefit instead of returning them to the Consolidated Revenue Fund (CRF). The CRF, which is intended to manage government finances, had a negative balance of N17.1 trillion as of December 31, 2021, which included N4.4 trillion in Ways and Means advances.
The allegation is particularly serious as the Constitution of Nigeria and the Financial Regulations of 2009 prohibit unauthorized withdrawals from the CRF or overdrawing government accounts. Section 80(2) of the Nigerian Constitution specifically mandates that no funds be withdrawn from the CRF without the approval of an appropriation act or supplementary act. Furthermore, the Financial Regulations stipulate that any interest incurred must be refunded.
The report revealed that the CRF, alongside four other ministries, departments, and agencies, had overdrawn accounts totaling N17.1 trillion without the necessary approvals or documentation. The breakdown included N9.41 trillion for domestic debt service, N4.45 trillion for Ways and Means withdrawals, and N483.97 billion for Paris Club loan refunds, among other components.
The government’s response highlighted that the CBN had treated the Ways and Means advances as though they were loans from its own balance sheet or syndicated facilities, which it argued was a mismanagement of funds. The Federal Government is now calling for the immediate refund of the N2.73 trillion in interest charged by the CBN.
The Auditor-General’s report also stressed that the irregularities were rooted in weaknesses in internal controls at the Office of the Accountant-General of the Federation. It described the situation as a significant risk to public finance, warning that unauthorized financing of expenditures and avoidable interest payments exposed the government to unnecessary fiscal burdens.
In its recommendations, the Auditor-General called for the Accountant-General to justify the N17.1 trillion overdraft to the Public Accounts Committees of the National Assembly. The report further urged that sanctions be applied for irregular payments from public funds, in line with the Financial Regulations.
