The Central Bank of Nigeria (CBN) could face a request to withdraw its recently released audited annual financial reports for the years 2016 to 2022 due to discrepancies and irregularities discovered during an ongoing investigation. This investigation is being conducted by a Special Investigator appointed by President Bola Tinubu.
The probe, initiated in July, is part of the government’s anti-corruption efforts and includes the examination of the CBN, the Nigerian National Petroleum Corporation Limited (NNPCL), the Financial Reporting Council of Nigeria (FRC), and other Government Business Entities.
The investigative team, led by Jim Obazee, a former CEO of the Financial Reporting Council of Nigeria, is focusing on potential financial irregularities, questionable financial practices, and adherence to international financial standards.
Multiple sources close to the investigation have suggested that a presidential approval may soon be obtained, enabling the FRC to order the CBN to withdraw its audited financial reports for the seven-year period. Allegations have surfaced that the CBN’s financial accounts were not prepared according to International Financial Reporting Standards 9 (IFRS 9), which require full disclosure of all financial transactions. Instead, the CBN purportedly used guidelines obtained from the FRC to prepare its financial reports.
Furthermore, it has been alleged that the CBN paid N401.75 million to IFRS Academy for these guidelines, which were used to prepare the financial accounts. Such payments should typically be made into the Treasury Single Account, but in this case, they were reportedly directed to the IFRS Academy account, a limited guarantee company established by the FRC for training in IFRS accounting.
Officials close to the investigation assert that these guidelines should have been freely available and approved by the FRC’s board, with public accessibility. The CBN’s alleged avoidance of IFRS 9 standards may have resulted in understating financial figures.
The Special Investigator’s team has also recommended that the Department of State Services (DSS) question officials, including the Executive Secretary/Chief Executive Officer of the FRC, Shuaibu Ahmed, and top FRC officials. The DSS has already interviewed some CBN deputy governors during the course of the investigation.
While economists and civil society organizations hold differing views on the probe, with some expressing concerns about its potential impact on foreign investment, others believe it is necessary to ascertain any infractions or abuses of office. The investigation covers not only the CBN but also other government entities, reflecting a broader effort to improve transparency and accountability in the Nigerian financial system.
Ultimately, the outcome of this investigation will determine whether the CBN’s financial reports are withdrawn, and it may have broader implications for the financial sector and governance in Nigeria.
