Auditor-General Alleges CBN Misappropriated ₦2.7 Trillion in Ways and Means Interests

A startling revelation by the Auditor-General of the Federation has accused the Central Bank of Nigeria (CBN) of misappropriating ₦2.7 trillion in interests related to the controversial Ways and Means advances. The report, which sheds light on significant financial irregularities, has reignited concerns over accountability and fiscal management within one of the nation’s most critical institutions.

The Ways and Means advances, a mechanism allowing the federal government to borrow directly from the CBN to cover budget shortfalls, have long been a subject of scrutiny. While this approach can provide short-term financial relief, it is meant to be tightly regulated to avoid inflationary pressures and fiscal instability. However, the Auditor-General’s findings suggest that the CBN may have exploited the system, accruing unaccounted-for interest payments over several years.

According to the audit report, discrepancies were discovered in the computation and allocation of interests on the Ways and Means loans, with trillions of naira remaining unsubstantiated. The lack of transparency in these transactions has raised red flags among financial analysts and policymakers, who fear the implications for Nigeria’s already strained economy.

Critics argue that such practices undermine public trust in the CBN, an institution tasked with maintaining monetary stability and fostering economic growth. The alleged mismanagement also casts doubt on the bank’s independence, as it suggests a possible overreach in its role as the government’s lender of last resort.

The Auditor-General’s revelations have sparked calls for a thorough investigation into the CBN’s operations during the affected period. Lawmakers and civil society organizations are demanding greater oversight and structural reforms to prevent future abuses. Some have even proposed a cap on the government’s reliance on Ways and Means to curb excessive borrowing and restore fiscal discipline.

Beyond the financial irregularities, the report highlights broader concerns about Nigeria’s fiscal health. The federal government’s mounting debt, exacerbated by recurring budget deficits and declining oil revenues, has placed significant pressure on the economy. Analysts warn that unchecked borrowing from the CBN could lead to hyperinflation, depreciate the naira further, and erode investor confidence.

The CBN, for its part, has yet to issue a formal response to the allegations. However, insiders suggest that the bank may argue that its actions were necessary to support the government during economic downturns. While such justifications might hold some weight, they are unlikely to assuage critics demanding accountability and a return to prudent financial management.

As Nigeria grapples with economic challenges, including rising inflation and dwindling foreign reserves, the fallout from this revelation could have far-reaching consequences. The allegations not only place the CBN under intense scrutiny but also serve as a wake-up call for the urgent need to address systemic flaws in the nation’s fiscal policies. Whether this moment leads to meaningful reform or becomes another episode of unaddressed financial mismanagement will depend on the government’s willingness to take decisive action.