Katsina audit flags abandoned N2bn Ajiwa dam project, N1.89bn housing loan arrears, N594m water debts
By Aminu Abubakar
The 2025 Report of the Auditor-General on the Accounts of the Government of Katsina State has raised fresh concerns over public financial management, revealing an abandoned N1.996 billion Ajiwa Dam rehabilitation project, N1.89 billion in outstanding housing loan repayments, N593.75 million in unpaid water bills and a N12.82 billion investment in Kano Electricity Distribution Company (KEDCO) that has yet to yield any dividend.
The audit report also highlighted unresolved issues across several ministries, departments and agencies, including weak debt recovery, poor asset management, unapproved expenditure and revenue shortfalls, urging the state government to strengthen oversight and enforce compliance with financial regulations.
Among the major findings contained in the report is the abandoned contract for the rehabilitation of the Ajiwa Dam and Water Works, Clarifiers and Storage Tanks, awarded by the Ministry of Water Resources.
According to the Auditor-General, the contract was awarded to KAIBO INTERNATIONAL NIG Ltd on April 27, 2016, at a cost of N1,996,861,690.85 (N1.996 billion), with a completion period of 18 months.
The report stated that the contractor received an advance payment of N796,744,676.30 (N796.744 million), while the contract was “BONDED/GUARANTEED by Diamond/Access Bank Plc.”
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However, auditors found that the company abandoned the project site and failed to make reasonable progress on the work.
The report stated, “The Company abandoned the site and failed to make reasonable progress with the project.”
It further disclosed that because of the company’s inability to refund the advance payment, the Auditor-General directed the Ministry of Water Resources to write to the guarantor bank to recover the outstanding balance.
According to the report, N213,146,053.71 remains outstanding.
“As at the time of writing this report, the Diamond Bank has not remitted back the remaining Advance to the State Government Account due to the inability to secure Approval from the Bank headquarters,” the report stated.
The audit also highlighted unresolved issues involving the Katsina State Housing Authority, where outstanding repayments continue to trail housing schemes established by both the state government and the state’s 34 local government councils.
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According to the report, the Housing Authority disbursed N4,687,586.00 as revolving housing loans, including loans inherited from the defunct Kaduna State. It recovered N1,097,971.16 in 2023 and an additional N231,000.00 during the year under review, leaving an outstanding balance of N3,358,614.84.
Beyond the revolving loans, the report stated that the state government constructed 1,610 houses across six housing schemes at a total cost of N9,455,633,305.54.
The Auditor-General reported that N7,927,251,037.91 had been recovered as of December 31, 2024, while an additional N215,990,801.73 was recovered during the year under review. Despite the recoveries, the six housing schemes still have an outstanding balance of N1,312,391,465.90 as of December 31, 2025.
The report also reviewed the Ahmadu Bello Housing Estate, owned by the state’s 34 Local Government Councils and managed by the Housing Authority. The estate comprises 510 houses constructed at a cost of N2,627,949,860.24.
According to the audit, N1,927,255,826.13 had been recovered by the end of 2024, while N120,734,940.42 was recovered during the year under review, leaving an outstanding balance of N579,959,093.69.
Combined, the outstanding balances from the six state-owned housing schemes and the Ahmadu Bello Housing Estate amount to N1,892,350,559.59.
The Auditor-General observed that civil servants who benefited from the housing schemes were expected to repay their loans within 15 years through salary deductions, while non-civil servants were required to complete repayment within one year. However, the report noted that “some beneficiaries default in the conditions which require Government attention.”
The audit further revealed that the Katsina State Water Board is owed N593,754,563.00 in unpaid water bills across different categories of consumers.
Domestic consumers accounted for the highest debt with N360,847,137.00 (N360.847 million) followed by industrial consumers with N94,969,966.00 (N94.969 million) commercial consumers with N76,921,130.00, institutions, agencies and federal parastatals with N20,305,644.00, state parastatals with N30,307,036.00, water tank operators with N214,900.00, while the Nigerian Air Force owes N10,188,750.00.
Although the outstanding debt fell from N997,504,183.00 (N997.504 million) in 2024 to N593,754,563.00 (N593.754 million) during the reporting period, the Auditor-General recommended that the government establish “a very strong task force to authenticate and recover the debt.”
The report also disclosed that the Katsina State Rural Electrification Board has investments valued at N12,820,137,655.00 (N12.820 billion) in KEDCO, covering both pre-privatisation and post-privatisation investments.
Despite the size of the investment, the report stated that no return on investment or dividend has been received since the investment was made.
It stated: “The State Government has invested both Pre-Privatization and Post-Privatization worth N12,820,137,655.00 at KEDCO. No return of investment or dividend was received since the investment was made.”
The Auditor-General also reviewed the operations of the Katsina State Contributory Health Management Agency (KTSCHMA), which generated N2,996,483,681.59(N2.996 billion) in contributions and other income during the year, in addition to an opening balance of N415,206,211.59 (N415.206 million) bringing the total available funds to N3,411,689,893.18 (N3.411 billion).
According to the report, the agency invested N1,250,000,000.00 (N1.250 billion) in Treasury Bills with United Bank for Africa (UBA), while ending the year with a balance of N247,112,525.00 (N247.112 million) after making payments for capitation, fee-for-service, ICT, administration and reserve funds.
The Auditor-General also identified several operational and financial lapses across government institutions.
At the Ministry of Basic and Secondary Education, only N22,662,500.00 was generated against the budgeted revenue target of N103,250,000.00, prompting auditors to urge management to improve revenue collection.
Within the Ministry of Justice, auditors observed that 18 laptops valued at N4,500,000.00 had been purchased but were not recorded in the store ledger.
The report recommended that “All items purchased should be taken into the Store for record purposes, like Ledger, SRV, SIV and other relevant documents.”
The audit also queried transactions in the Department of Banking and Finance, where N106,126,970.76 (N106.126 million) from dividend receipts and N30,000,000.00 being loan refunds from 30 Local Governments were allegedly expended without approval and without value.
According to the report, the Katsina State Public Complaint and Anti-Corruption Commission recovered N68,870,000.00 (N68.870 million) while the governor approved the recovery of only 10 per cent of the unrecovered balance amounting to N3,441,351.69 from retirement benefits, bringing the total recovery to N72,311,351.69. The audit also noted that N13,600,000.00 was verified as official departmental expenditure.
Overall, the Auditor-General’s report paints a picture of persistent financial management challenges across ministries, departments and agencies, with abandoned capital projects, outstanding loans, unpaid public debts, weak revenue generation, poor asset management and instances of expenditure made without due approval continuing to undermine accountability in the management of public resources.
The findings underscore the scale of public funds tied up in stalled projects and unpaid obligations, including the abandoned N1.996 billion Ajiwa Dam rehabilitation contract, N1.89 billion in outstanding housing loan repayments, N593.75 million in unpaid water bills and a N12.82 billion investment in KEDCO that has yet to generate any return.
The Auditor-General urged the state government and the affected agencies to take urgent corrective measures to recover outstanding public funds, strengthen internal controls, improve accountability and prevent the recurrence of similar financial lapses.
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