FG Accuses CBN of Misappropriating ₦2.73tn in Ways and Means Interest Payments
The Federal Government of Nigeria has accused the Central Bank of Nigeria (CBN) of misappropriating ₦2.73 trillion in interest payments linked to Ways and Means advances, raising serious concerns over irregularities in the management of public funds.
The allegation was detailed in the 2021 Consolidated Financial Statement submitted to the National Assembly by the Auditor-General, Shaakaar Chira. The report, referenced AuGF/AR.2021/01 and dated July 31, 2024, has prompted calls for accountability and reforms in government financial practices.
Controversy Over Ways and Means Advances
The Ways and Means facility is a temporary loan mechanism provided by the CBN to finance government budget deficits. However, the audit revealed that the CBN retained ₦2.73 trillion in interest charges, allegedly using the funds “for its sole benefit” instead of returning them to the Consolidated Revenue Fund (CRF).
According to the report, the CRF had a negative cash balance of ₦17.1 trillion as of December 31, 2021, including ₦4.4 trillion from Ways and Means advances.
This practice, the Auditor-General noted, contravenes the 1999 Constitution (as amended) and the 2009 Financial Regulations, which prohibit unauthorised withdrawals or overdrafts from government accounts.
Constitutional Violations and Financial Irregularities
Section 80(2) of the Constitution mandates that no funds can be withdrawn from the CRF without legislative approval via an appropriation or supplementary act. Additionally, paragraph 710 of the Financial Regulations bars overdrafts and requires the refund of any interest incurred.
Despite these provisions, the report highlighted that the CRF and four other ministries, departments, and agencies (MDAs) had overdrawn accounts totalling ₦17.1 trillion—a figure unsupported by appropriate approvals or documentation.
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The breakdown of the negative balance included:
•₦9.41 trillion for reconciled domestic debt service
•₦4.45 trillion in Ways and Means withdrawals
•₦483.97 billion for Paris Club loan refunds
•Deferred state loan deductions and CPV coupon payments
Federal Government’s Response
The Federal Government accused the CBN of treating the Ways and Means facility as though it were a loan from its balance sheet or a syndicated facility involving local and foreign lenders. It demanded an immediate refund of the ₦2.73 trillion interest charges to the CRF.
The audit report emphasized:
“The interest charged on Ways and Means by CBN was misappropriated by CBN for its sole use, whereas the Actual Ways and Means was not a facility from its funds or balance sheet, nor was it a syndicated facility.”
The government also directed that the interest charges should not be securitised, unlike other overdraft components currently managed by the Debt Management Office (DMO).
Auditor-General’s Recommendations
The Auditor-General recommended that the Accountant-General of the Federation justify the ₦17.1 trillion overdraft before the Public Accounts Committees of the National Assembly. He urged enforcement of paragraph 3106 of the Financial Regulations, which outlines penalties for irregular payments from public funds.
The report attributed the irregularities to weaknesses in internal control processes at the Office of the Accountant-General of the Federation, describing the situation as a significant risk to public finance.
It further warned that unauthorised expenditures and avoidable interest payments imposed unnecessary fiscal burdens on the government, demanding urgent corrective measures.
Conclusion
The Federal Government’s allegations against the CBN have cast a spotlight on Nigeria’s fiscal management practices, particularly the handling of Ways and Means advances.
With the National Assembly set to scrutinize the audit report, stakeholders are calling for greater transparency, accountability, and reforms to prevent future abuses and ensure compliance with financial regulations.
This unfolding controversy is expected to fuel debates about monetary policy governance and oversight mechanisms within Nigeria’s financial system.
