Nigerian troops were denied weapons to fight Boko Haram and thousands of lives were lost because of rampant fraud in the procurement process, President Muhammadu Buhari has alleged.

Buhari ordered anyone involved in corrupt multi-billion dollar deals for weapons and equipment to be "brought to book" after receiving a report from a committee set up to probe the issue.

Former national security advisor Sambo Dasuki is accused of awarding some $2 billion in "fictitious and phantom contracts" for fighter jets, helicopters and bombs that never materialised.

But he hit back, denying anything untoward and stating that sensitive military deals and payments were all sanctioned by former president Goodluck Jonathan.

"All contracts and accruing payments were with the approval of the president and commander-in-chief of the armed forces," he said in a statement.

"Once the ex-president approved, the former NSA paid. So, there was due process for every purchase in line with regulations guiding arms procurement for the armed forces...

"There was no room for awarding fictitious contracts. The conclusions of the panel were presumptive, baseless and lacked diligence."

- 'Ready for trial' -

Dasuki, a 60-year-old former army colonel, is already facing money laundering and illegal possession of weapons charges and claimed he was being targeted by Buhari's anti-corruption campaign.

But his assertions that Jonathan knew about the payments in question will be explosive in Nigeria and could see pressure on the former president to answer questions.

The country's former oil minister, Diezani Alison-Madueke, was arrested in London in October as part of a British investigation into bribery and money laundering.

Buhari has said "mind-boggling" sums have disappeared from the oil sector and has vowed to overhaul the industry to bolster weakened government revenues caused by the global slump in crude prices.

Dasuki, who said the committee never contacted him to clarify any issues and some deals related to a time before he took office, vowed to have his day in court.

"I am ready for trial on all these allegations in order to prove to Nigerians that I did nothing untoward in office," he said.

Buhari described the findings of the committee's interim report as "extremely worrying" given the desperate need for troops to have the right equipment to tackle Boko Haram.

"Had the funds siphoned to these non-performing companies been properly used for the purpose they were meant for, thousands of needless Nigerian deaths would have been avoided," he added.

The retired army general and former military ruler came to power in May, vowing to crush the Islamist rebels whose insurgency has killed at least 17,000 people since 2009.

Frontline troops serving under Jonathan frequently complained the militants were better armed while they themselves lacked the proper equipment, including bullets, to fight.

In one instance, some frustrated soldiers fired shots at their commander's vehicle. They were court-martialed, found guilty of mutiny and sentenced to death.

The complaints came despite Nigeria having one of Africa's biggest defence budgets.

- 'Illicit transactions' -

According to a statement from Buhari's office late Tuesday, the committee "unearthed several illicit and fraudulent financial transactions".

Some $5.3 billion was provided to the Office of the National Security Advisor, defence headquarters and the headquarters of the army, navy and air force, the statement said.

"It was observed that in spite of this huge financial intervention, very little was expended to support defence procurement," it added.

Some 53 of 513 contracts awarded were "failed contracts" and Dasuki allegedly sanctioned huge payments without contractual evidence or explanations.

The "fictitious and phantom contracts" related to the purchase of four Alpha (fighter) jets, 12 helicopters, bombs and ammunition.

But they "were not executed and the equipment (was) never supplied to the Nigerian air force, neither are they in its inventory", it added.

Dasuki, who is also accused of asking Nigeria's central bank to transfer $132 million and almost 10 million euros to accounts in west Africa, Britain and the United States, rejected the claims as "laughable".

Service chiefs wrote to him to acknowledge receipt of the materiel, he added, describing himself as "just the clearing house" who only acted with presidential approval.

"I am not a thief or treasury looter as being portrayed," he added.