Experts say the money allocated for non-existent teachers was siphoned off by corrupt state officials.
Niger, one of the world's poorest countries, is shelling out more than 4.5 million euros every month for "non-existent" teachers, the state anti-corruption agency said Tuesday.
The revelation came a day after teachers and students launched a crippling week-long strike in protest over the non-payment of salaries and scholarships.
Salissou Oubandona, the number two in the HALCIA graft-fighting agency, said the money was allocated for 2,565 fictitious teachers in five of the west African nation's eight provinces.
He said a "school-by-school study" showed that "1,917 teachers did not exist at all", while the names of 648 "figures two or three times" on the state payrolls.
The study was conducted in June by the government. Experts say the money allocated for non-existent teachers was siphoned off by corrupt state officials.
According to teachers' unions, 80 percent of the educational staff work on a contractual basis with salaries ranging from on average between 114 euros ($127) and 152 euros a month.
Niger's union of teachers and researchers on Monday launched a seven-day strike to demand the payment of salary and grant arrears.
The country's minister for education minister Mohamed Ben Omar acknowledged there had been a problem with salary payments, but insisted the problem had been resolved.
"Four months of salary arrears" at Zinder University in central Niger had already been taken care of, Ben Omar told public television.
He blamed the delay in paying wages and grants on the country's military expenditure which had "raked in" all the treasury's revenues.
Since February 2015, Boko Haram has staged a series of attacks in the Diffa region of southeast Niger, which lies just across the border from the Islamists' stronghold in northeastern Nigeria.
In late July this year a multinational force, drawn from Nigeria, Niger, Chad and Cameroon, was formed to tackle the Islamic insurgents and clear them out of towns and villages. The force is funded by each of the participating states.
In another blow for the administration, Niger magistrates on Tuesday accused the government of manipulating the judiciary by appointing judges close to the regime.
"The executive has begun a massive infiltration of the judicial machinery by systematically weeding out professional magistrates," the Autonomous Union of Niger Magistrates (SAMAN) said in a statement.
It cited the high profile appointments in September of two men who are close to President Mahamadou Issoufou and who were shunted from the presidential office and given top legal posts.
"How can one hope for neutral and impartial justice when one fills up these posts with people whose political affiliations are crystal clear?" it said, calling for these two appointments to be cancelled.