The Federal Government has directed Ministries, Departments, and Agencies (MDAs) to stop the era of contract awards without proof of available funds as part of its current efforts to ensure improved efficiency of the public finance system
The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, gave this hint during his speech at the Office of the Accountant General of the Federation’s (OAGF) stakeholders’ engagement on the 2025 capital budget on Wednesday in Abuja.
According to him, to ensure that federal capital projects are backed with funding, warrants and Authorities to Incur Expenditure (AIEs) will now be issued before any legal commitment is made.
He 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.
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“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”, the minister stressed.
While noting that distortions costing the economy 5% of GDP have been removed, boosting revenue inflows into the Federation Account, Edun, however, maintained that the government’s growth target remained at 7% annually to achieve rapid and inclusive development.
Speaking at the forum, Director-General of The Budget Office, 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 (NNPCL) and the Frontier Exploration Fund.
He, however, explained that government had initiated moves to amend the Act through the National Assembly to recover lost revenue even as the global oil price volatility and the Nigeria’s crude oil under-production were constraining public spending.
In his remarks, the Accountant-General of the Federation, Mr. Shamsuldeen Ogunjimi, assured MDAs and contractors that genuine contractual obligations already captured on the Government Integrated Financial Management Information System (GIFMIS) would be honoured.
The AGF 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.”
The forum was attended by key budget and procurement stakeholders as part of the government’s drive to align spending with revenue realities, curb waste, and ensure timely completion of capital projects nationwide.
