Nigeria bars ministries from awarding unfunded contracts to tighten fiscal control

The Federal Government of Nigeria has implemented a stringent new policy to curb financial indiscipline and ensure adherence to procurement regulations. Ministries, Departments, and Agencies (MDAs) are now barred from entering into any contract or financial commitment without first securing the necessary budgetary approval and cash backing.

This directive was formally communicated through a Federal Treasury Circular dated July 31, 2026, signed by the Accountant-General of the Federation, Dr. Shamsudeen Ogunjimi. The circular, addressed to key government officials including ministers and permanent secretaries, highlights widespread violations of the Public Procurement Act of 2007 and other financial regulations governing public expenditure as the reason for the strengthened measures.

A core provision of the new guidelines mandates that no MDA can 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 contract sum has been officially released by the Minister of Finance and Coordinating Minister of the Economy to the Accountant-General's office. MDAs are required to download and attach copies of these Warrants or AIEs generated through the Government Integrated Financial Management Information System (GIFMIS) as proof of available funds before contracts are awarded or payments processed.

The circular further warns that all financial commitments, including purchase invoices and employee payables, must not exceed the value of the available warrants. This measure is designed to prevent the awarding of contracts for projects that lack adequate funding, thereby avoiding abandoned projects and ensuring responsible fiscal management across government operations.