By Daniel Edu
The Federal Government has leveled serious accusations against the Central Bank of Nigeria (CBN), alleging that the apex bank misappropriated ₦2.73 trillion in interest payments linked to Ways and Means advances.
This claim is outlined in the Federal Government’s consolidated financial statement for the fiscal year ending December 31, 2021. The report, prepared by the Auditor-General of the Federation, Shaakaar Chira, was submitted under reference number AuGF/AR.2021/01 and dated July 31, 2024.
According to the Auditor-General’s findings, the CBN allegedly retained the ₦2.73 trillion in interest payments for its own benefit, rather than remitting them to the Consolidated Revenue Fund (CRF) as mandated by law.
### What Are Ways and Means Advances?
Ways and Means advances refer to short-term loans provided by the CBN to the Federal Government to cover budgetary shortfalls. However, this financial mechanism has come under increasing scrutiny due to concerns over compliance with constitutional and regulatory requirements.
The Federal Government’s report claims that the interest payments, totaling ₦2.73 trillion, were withheld by the CBN in violation of both constitutional provisions and financial regulations. The report specifically points to Section 80(2) of the 1999 Constitution, which prohibits any withdrawals from the CRF without the proper legislative authorization.
Additionally, the 2009 Financial Regulations’ paragraph 710 restricts overdrafts and requires that any interest incurred on such advances be refunded to the CRF.
### Alleged Misappropriation
The Auditor-General’s report highlights that, in addition to the CBN’s actions, four other ministries, departments, and agencies had overdrawn accounts totaling ₦17.1 trillion without the necessary approvals or documentation.
The report asserts that the CBN acted in its own interest by retaining the ₦2.73 trillion in interest payments. It emphasizes that the Ways and Means advances were not a loan facility funded by the CBN’s own resources, nor were they sourced from a group of local or international lenders.
“The interest charged on Ways and Means by CBN was misappropriated by the CBN for its sole use, whereas the actual Ways and Means facility was not a product of its balance sheet,” the Auditor-General’s report states. “CBN must therefore refund the ₦2.73 trillion interest it unlawfully retained to the Federal Government of Nigeria as of December 31, 2021.”
This accusation has added to growing concerns about the financial management practices of the CBN and its adherence to legal and regulatory frameworks governing public finances.
