The World Bank has identified $32 million in unaccounted funds in a Nigerian water sector project, raising concerns over likely embezzlement and mismanagement.
According to the newly released FY2024 Sanctions System Annual Report, the Bank’s Integrity Vice Presidency (referred to as ‘INT’ in the report) flagged the discrepancies after a forensic review.
The funds, intended to bolster water infrastructure, were not adequately accounted for, prompting an intervention to safeguard the project’s integrity.
In a decisive move to mitigate risks, the World Bank engaged with the project team, including Nigeria’s Task Team Leader, Operations Manager, and Financial Management Specialist.
The bank recommended steps to recover the funds and prevent further losses. Consequently, the Central Bank of Nigeria has been asked to reimburse $22m, while $6m remains in the project account to cover anticipated operational expenses.
The bank has also limited the project’s financial operations to direct payments to curb further irregularities.
“INT followed up on risks identified regarding a project in Nigeria’s water sector and flagged to operations the risk, which was associated with $32m of unaccounted funds.
“INT met with the Task Team Leader, Operations Manager, Programme Leader, and Financial Management Specialist to identify steps to reduce the risk of embezzlement. As a result, the project team asked the Central Bank (of Nigeria) to reimburse the full amount ($22m) and limited the remainder of the project to direct payments.
“The local account remained with about $6m in undisbursed balance, a little more than the anticipated PIU expenses for the remainder of the project,” the Punch newspaper said in a report on Monday.
According to the report, the World Bank has imposed a 1.5-year debarment with conditional release on a Nigerian engineering firm and its managing director for fraudulent practices in the Nigeria Erosion and Watershed Management Project.
It added that the decision follows an investigation by the bank’s Integrity Vice Presidency, which uncovered instances of misrepresentation during the bidding and execution phases of the project.
GIK/APA