D’banj, the Nigerian Afrobeats star, has been arrested on suspicion of fraud after millions of dollars meant to help unemployed youths start businesses went missing.
The artist, who claimed to be the scheme’s brand ambassador, has surrendered.
President Muhammadu Buhari launched the N-Power initiative in 2016.
However, many beneficiaries have been complaining for months that they have not received their grants.
In a statement issued on Wednesday, Nigeria’s anti-corruption agencies stated that “billions of naira” had been diverted.
Lawyers for D’banj, whose real name is Oladapo Daniel Oyebanjo, have denied the anti-corruption agency’s claim that their client ignored multiple summonses.
They stated that the artist turned himself in willingly on Tuesday and that he will cooperate with the investigation.
According to the government, more than two million Nigerians between the ages of 18 and 35 have benefited from the N-Power scheme since its inception.
According to the authorities, at least 280 billion naira ($629 million; £516 million) was distributed in 2019 to beneficiaries who started small businesses.
Ten other people, in addition to D’banj, are being investigated, according to the anti-corruption agency.
“The investigation will be comprehensive and will also include other fraud collaborators and the banks where the beneficiaries’ accounts are domiciled,” according to a statement.
The Ministry of Humanitarian Affairs, which oversees N-Power, stated that the artist had no official relationship with them and that his claims to be an ambassador for the scheme were false.
Oliver Twist, D’banj’s 2012 hit, won him fans across the continent and in the diaspora.
His one-year-old son drowned in a pool at his home in the commercial city of Lagos two years ago.