- FG has banned MDAs from awarding contracts without budget approval and cash backing
- The new directive aims to strengthen fiscal discipline and enforce procurement laws
- Officials who violate the policy risk sanctions under existing financial regulations
The Federal Government has introduced stricter financial controls, directing all Ministries, Departments and Agencies (MDAs) to refrain from awarding contracts or making financial commitments without first obtaining the required budgetary approvals and confirmed funding.
Eko Hot Blog gathered that the new directive was outlined in a Treasury Circular dated July 31, 2026, issued by the Accountant-General of the Federation, Dr. Shamseldeen Ogunjimi.
Addressed to ministers, permanent secretaries, chief executives of government agencies, accounting officers and other senior public officials, the circular said the move became necessary because many MDAs had failed to comply with existing procurement and public finance regulations.
According to the Accountant-General, the revised guidelines are intended to strengthen the implementation of the 2026 capital budget while ensuring greater accountability in the management of public funds.
Under the new policy, no government agency is allowed to award a contract, sign any agreement or create a financial obligation unless it has first received a Warrant or Authority to Incur Expenditure (AIE) covering the value of the project or the portion being committed. The approval must come through the Minister of Finance and Coordinating Minister of the Economy before being released by the Office of the Accountant-General.
The circular also makes it compulsory for MDAs to attach copies of approved Warrants or AIEs generated through the Government Integrated Financial Management Information System (GIFMIS) before contracts can be processed or payments made. The requirement is aimed at confirming that funds are available before any commitment is entered into.
Government institutions were further instructed to ensure that all financial obligations, including purchase orders and employee-related payments, remain within the limits of approved and uncommitted funds. Spending beyond the available allocation is prohibited.
In another measure, the Bureau of Public Procurement was directed not to issue “No Objection” certificates for procurement requests that are not backed by valid budgetary approvals.
The Accountant-General warned that public officers who approve contracts without adequate budget provisions or cash backing could face legal consequences, noting that such actions violate the provisions of the Independent Corrupt Practices and Other Related Offences Commission (ICPC) Act.
To improve planning and budget execution, every MDA has also been instructed to submit annual and quarterly cash plans for capital projects. Going forward, quarterly submissions must reach the Office of the Accountant-General no later than the 15th day of the first month of each quarter.
The circular urged government institutions to focus on projects that align with national priorities, while the Cash Management Technical Committee will continue to review implementation plans and advise the Federal Cash Management Committee on funding priorities.
Accounting officers, directors of finance, internal auditors and heads of agencies were directed to ensure full compliance with the new guidelines.
The latest measures reinforce the Federal Government’s drive to strengthen fiscal discipline, improve transparency in public spending, minimise abandoned projects and ensure that contracts are awarded only when funding has been properly secured.
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