The National Security Adviser (NSA) Babagana Monguno, says funds meant for the purchase of military arms and ammunition are missing.
Mr Monguno made the revelation on Friday while speaking to BBC Hausa. His allegations comes a month after service chiefs who resigned were replaced by President Muhammadu Buhari.
It also comes weeks after some soldiers resigned over on account of being ill-equipped to fight insurgency.
The immediate past service chiefs have now been rewarded with ambassadorial appointments aimed at conferring diplomatic immunity on them to shield them from prosecution by the International Criminal Court (ICC).
They were accused of perpetuating crimes against humanity and violations of human rights.
Monguno in the interview said the new service chiefs complained of meeting nothing on ground for them to tackle worsening insecurity bedeviling the nation.
“Now that he (President Buhari) has brought new people (service chiefs), hopefully they will devise some ways… I’m not saying the former service chiefs diverted the money, but the money is missing. We don’t know how, and nobody knows for now,” the NSA said.
“The president will surely probe this matter. As we speak, the Nigerian Governors’ Forum too is also wondering where all the money went. I can assure you the president takes issues of this nature seriously.
“The fact is that preliminary investigation showed the funds are missing and the equipment is nowhere to be found.
“When the new service chiefs assumed office, they also said they did not see anything on ground,” he added.