The Federal Government has barred Ministries, Departments, and Agencies (MDAs) from awarding contracts or making financial commitments without prior budget approval and confirmed funding in a move to enforce fiscal discipline and reduce abandoned projects.
The directive, issued in a Treasury Circular dated July 31, 2026, was signed by the Accountant-General of the Federation, Dr. Shamseldeen Ogunjimi, and sent to top government officials, including ministers, permanent secretaries and heads of agencies.
According to the circular, the new guidelines became necessary due to persistent violations of the Public Procurement Act, 2007, and existing financial regulations.
Under the new rules, MDAs are prohibited from issuing contract awards, signing agreements, or incurring any financial obligations without a valid Warrant or Authority to Incur Expenditure (AIE) approved by the Minister of Finance.
“All expenditures must be backed by a valid warrant/AIE. No contract should be awarded without confirmed funding,” the circular stated.
The government also directed agencies to provide proof of funding through the Government Integrated Financial Management Information System (GIFMIS) before processing contracts or payments.
Additionally, MDAs are required to ensure that all financial commitments, including invoices and staff-related payments, do not exceed available funds.
The Bureau of Public Procurement (BPP) has been instructed to reject requests for “No Objection” certificates that lack proper funding approval.
The circular warned that awarding contracts without budgetary provision constitutes an offence under the ICPC Act, reinforcing accountability among public officers.
To improve budget implementation, MDAs must now submit annual and quarterly cash plans while prioritizing projects in line with national policy goals.
The directive strengthens the government’s cash management reforms introduced in 2024 and aligns with ongoing efforts by the Tinubu administration to promote transparency, curb waste, and ensure value for money in public spending.
Officials say the policy is expected to reduce abandoned projects, limit unpaid liabilities, and ensure that only properly funded projects are executed.
