Auditor General Accuses CBN of Misusing N2.7 Trillion Ways And Means Interests
- The Nigerian government has accused the Central Bank of Nigeria (CBN) of misappropriation of funds
- The auditor-general stated in a recent report that the apex bank misused about N1.7 trillion of Ways and Means interests
- The report, which was submitted to the National Assembly, said the CBN refused to return the money to the Consolidated Revenue Fund
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Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
The government has alleged that the Central Bank of Nigeria (CBN) misused N2.7 trillion interest payments from Ways and Means advances.
The allegation was exposed in the government's consolidated financial statements for December 31, 2021, submitted to the National Assembly by the Auditor-General, Shaakaar Chira.
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CBN allegedly refused to return N1.7 trillion
The Ways and Means is a loan mechanism the CBN gives to the Nigerian government to finance budget shortfalls.
The report claimed that the apex bank retained interest charges on the N2.73 trillion, saying the funds were used by the CBN rather than returned to the Consolidated Revenue Fund (CRF).
Punch reports that the CRF's negative cash balance was N17.1 trillion as of December 31, 2021, including N4.4 trillion in Ways and Means advances.
Nigeria’s constitution prohibits unauthorised withdrawals from the CRF or overdrawn government accounts.
The report disclosed that the CRF and four other MDAs had overdrawn accounts totalling N17.1 trillion.
Breakdown of Ways and Means withdrawals
A breakdown of the CRF included N9.41 trillion for domestic debt service, N4.45 trillion for Ways and Means withdrawals, and N483 billion for Paris Club refunds.
Others included deferred state loan deductions and CPV coupon payments.
The government disclosed that the CBN had mismanaged the Ways and Means advances, treating it as if the funds were loans from its balance sheet or a syndicated facility from local or foreign banks.
The report argued that the CBN wrongly retained the N2.73 trillion interest on the Ways and Means advances and asked for its refund to the CRF.
FG asks CBN to refund money
Under ex-President Muhammadu Buhari, the Nigerian government securitised the CBN’s Ways and Means.
Meanwhile, the auditor-general asked the Accountant-General of the Federation to justify the misused funds and ensure that sanctions contained in the Financial Regulations were applied.
The report blamed the irregularities on weaknesses in the internal control mechanisms at the Office of the Accountant-General of the Federation.
CBN explains converting foreign currency in domiciliary accounts
Legit.ng earlier reported that CBN had clarified that financial institutions should allow holders to convert foreign currencies in domiciliary accounts to naira.
CBN stated that all conversions must be submitted and reported as part of the bank's exchange rate needs.
In February 2024, the apex bank reaffirmed that it would not coerce domiciliary account holders to convert their holdings into naira.
Proofread by Kola Muhammed, journalist and copyeditor at Legit.ng
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