The Federal Government has prohibited Ministries, Departments and Agencies from awarding contracts or entering into financial commitments without obtaining the necessary budgetary approval and cash backing, as part of efforts to curb abandoned projects and strengthen fiscal discipline.
The directive was contained in a Federal Treasury Circular dated July 31, 2026, signed by the Accountant General of the Federation, Dr Shamseldeen Ogunjimi, and addressed to ministers, permanent secretaries, heads of extra ministerial agencies, accounting officers and federal pay officers.
According to the circular, the new operational guidelines became necessary following persistent violations of the Public Procurement Act, 2007, and other financial regulations governing public spending.
Under the new directive, no ministry, department or agency is permitted to issue contract award letters, sign contracts or incur financial obligations without first obtaining a Warrant or Authority to Incur Expenditure covering the entire contract value or the committed portion of the project.
The Office of the Accountant General also directed MDAs to attach copies of Warrants or Authorities to Incur Expenditure generated through the Government Integrated Financial Management Information System as proof that funds are available before contracts are awarded or payments processed.
It further warned that financial commitments, including purchase invoices and employee related obligations, must not exceed the value of available warrants.
In addition, the Bureau of Public Procurement was directed to process requests for “No Objection” certificates only when they are supported by valid Warrants or Authorities to Incur Expenditure.
The circular reminded accounting officers that awarding contracts without budgetary provision, approval and cash backing constitutes an offence under the Independent Corrupt Practices and Other Related Offences Commission Act.
To improve budget implementation, the government instructed all MDAs to prepare and submit annual and quarterly cash plans for their capital projects to the Office of the Accountant General.
It stated that annual cash plans, beginning from July 15, 2026, alongside the first quarterly plans, were expected to be submitted on or before July 31, while subsequent quarterly plans must be filed by the 15th day of the first month of every new quarter.
The circular also directed government agencies to prioritise projects in line with the Federal Government’s policy objectives, noting that the Cash Management Technical Committee would continue reviewing implementation plans and advising the Federal Cash Management Committee on priority projects.
Accounting officers, directors of finance and other relevant officials were urged to ensure strict compliance with the directive.
The latest measure reinforces the Federal Government’s revised cash management policy introduced in 2024 to improve budget execution, prevent the award of unfunded contracts and reduce the growing number of abandoned public projects across the country.
The directive is also expected to curb the accumulation of unpaid contractual liabilities and ensure that capital projects are executed only when adequate funding has been secured.