By Peace Erewunmi

The Federal Government has directed all Ministries, Departments and Agencies (MDAs) to stop awarding contracts or entering into any financial commitments without first obtaining the required budgetary approval and cash backing. The move is aimed at strengthening fiscal discipline, curbing abandoned projects and ensuring strict compliance with Nigeria’s public procurement and financial management laws.

The directive was contained in a Federal Treasury Circular dated July 31, 2026, and signed by the Accountant-General of the Federation, Dr. Shamseldeen Ogunjimi. It was addressed to ministers, permanent secretaries, heads of extra-ministerial departments and agencies, accounting officers and other relevant government officials.

Under the new guidelines, no MDA is permitted to issue a letter of award, sign a contract or incur any financial obligation unless a Warrant or Authority to Incur Expenditure (AIE) covering the full or committed portion of the contract sum has been released by the Minister of Finance and Coordinating Minister of the Economy through the Office of the Accountant-General.

The circular also requires MDAs to attach copies of approved Warrants or AIEs generated through the Government Integrated Financial Management Information System (GIFMIS) as evidence that funds are available before contracts are awarded or payments processed. It further warns that financial commitments must never exceed the value of available budgetary approvals.

The Accountant-General reminded accounting officers that awarding contracts without budgetary provision, approval or cash backing constitutes an offence under the Independent Corrupt Practices and Other Related Offences Commission (ICPC) Act 2000. He urged all public institutions to strictly comply with the directive to promote transparency, accountability and prudent management of public funds.

The Federal Government said the policy is expected to reduce the incidence of abandoned projects, prevent the accumulation of unpaid contractual liabilities and ensure that capital projects are undertaken only when adequate funding has been secured. The Cash Management Technical Committee will continue to monitor implementation and advise on priority projects in line with government policy objectives.