The Federal Government has announced an ambitious plan to significantly reduce Nigeria's outstanding lapsed loans from $18 million to approximately $7 million, representing a substantial 61 percent reduction. This decisive move aims to address long-standing issues with donor-funded projects across the country.
Comprehensive Reforms for Financial Accountability
Dr. Shamseldeen Ogunjimi, the Accountant General of the Federation, revealed this strategic initiative during a crucial workshop held in Abuja on Tuesday. The gathering brought together Heads of Projects Financial Management Units and Coordinators of World Bank Funded projects to address persistent challenges in project implementation.
Lapsed loans represent financial obligations that have expired or become inactive due to non-compliance with loan terms and conditions. These problematic loans often result from failures to meet required standards for project implementation and reporting, leading to potential suspension of new borrowing opportunities for the country.
New Financial Management Framework
Dr. Ogunjimi emphasized that his office has implemented a series of critical management reforms designed to enhance transparency, accountability, and efficiency in the execution of World Bank Funded projects nationwide. "We will continue to address the issues that hinder projects from attaining high ratings, including lapsed loans and undocumented advances," he stated firmly.
The Accountant General highlighted the development of a comprehensive Financial Management Manual (FMM) that will guide all financial transactions in projects. All project Coordinators, Projects Accountants, Heads of Project Financial Management Units (PFMUs), and relevant stakeholders are strongly encouraged to utilize this manual to minimize infractions, improve performance, and sustain favorable ratings with the World Bank.
Blockchain Technology and Staff Continuity
In a groundbreaking development, Dr. Ogunjimi disclosed that the World Bank has commenced the rollout of its "Funds Chains" system – an innovative blockchain-based platform specifically designed to enhance transparency, accountability, and efficiency in managing development project funds. The initial phase will cover six pilot projects.
The Office of the Accountant General of the Federation (OAGF) and the World Bank have reached a significant agreement regarding project staff management. Financial Management staff will not be removed within six months before project closure to prevent lapsed loans and undocumented advances. This strategic measure aims to ensure smooth transitions and avoid disruptions to project implementation.
"For the sake of continuity in project implementation, the new project officer should be allowed to work alongside the outgoing management officer for at least three months to prevent project stoppage," Dr. Ogunjimi elaborated.
Collaborative Approach and Future Directions
While emphasizing the critical importance of collaboration, transparency, and accountability in project management, the Accountant General urged all accountants to work collectively to strengthen systems, build capacity, and deliver tangible results aligned with the Renewed Hope Agenda of the present administration.
Project coordinators will continue receiving formal notifications from the OAGF regarding outstanding lapsed loans and undocumented advances. Dr. Ogunjimi strongly advised all project coordinators and PFMUs to prioritize proper documentation, refund of lapsed loans, and strict adherence to World Bank agreements.
The World Bank Country Director in Nigeria, Mr. Mathew Verghis, represented by Mr. Akram Elshirbegy, expressed satisfaction with the significant progress made by the Accountant General's office. He called for continued OAGF support to ensure the continuity and success of World Bank projects in Nigeria, acknowledging the positive steps toward improved financial management and project sustainability.
