The Federal Government has warned Ministries, Departments and Agencies of Government against awarding contracts without the neecssary funds on ground.
The government said it was enthroning a new era of fiscal discipline in capital project execution, warning Ministries, Departments, and Agencies (MDAs) against awarding contracts without proof of available funds.
Accountant General of the Federation, Shamsuldeen Ogunjimi however assured MDAs and contractors that genuine contract obligations already captured on the Government Integrated Financial Management Information System (GIFMIS) would be honoured.
The Accountant General of the Federation, stated this during a stakeholders’ engagement on the 2025 capital budget organised by the Office of the Accountant General of the Federal (OAGF) on Wednesday in Abuja
Ogunjimi said “We want to restore confidence so that holding a government contract letter means something again,” “If it is on GIFMIS, it is a government liability and we will fund it.”
Speaking at the event, Finance Minister Wale Edun, warned MDAs from awarding contracts without necessary funds available
The minister said warrants and Authorities to Incur Expenditure (AIEs) will now be issued before any legal commitment was made.
Edun said “For the avoidance of doubt, no letter of award, contract signing, or financial obligation should be entered into unless corresponding warrants and AIEs covering the full or committed portion have been duly released,”.
The Minister added “We spend what we have earned… funds must be channelled diligently into investment in equipment and facilities that boost productivity, create jobs, and lift millions out of poverty,” .
Edun pointed out that distortions costing the economy 5% of GDP have been removed, boosting revenue inflows into the Federation Account.
However, he stressed that the government’s growth target is 7% annually, which is double the population growth rate, to achieve rapid and inclusive development.
Budget Office Director-General, Dr. Tanimu Yakubu linked the slow capital budget performance to revenue shortfalls in early 2025, citing provisions of the Petroleum Industry Act (PIA) 2022 which diverted significant oil earnings to the Nigerian National Petroleum Company Limited (NNPC) and the Frontier Exploration Fund.
He said “We have initiated moves to amend the Act through the National Assembly to recover lost revenue,” adding that oil price volatility and underproduction further constrained spending.
Director of Funds at the OAGF, Steve Ehikhamenor, urged MDAs to strictly follow budget prioritisation guidelines to match scarce resources with the most critical projects.
Ehikhamenor said “Inside priority, there is another priority. Our goal is to eliminate delays between budget approval and implementation,”.
The engagement, attended by key budget and procurement stakeholders, is part of the government’s push to align spending with revenue realities, curb waste, and deliver capital projects on time.
