The Federal Government has directed all Ministries, Departments and Agencies (MDAs) to stop awarding contracts or entering into financial commitments without first obtaining the necessary budgetary approval and cash backing.
The directive is aimed at strengthening fiscal discipline, reducing abandoned projects and ensuring strict compliance with Nigeria’s public procurement and financial regulations.
The new policy was contained in a Federal Treasury Circular dated July 31, 2026, and signed by the Accountant-General of the Federation, Dr. Shamseldeen Ogunjimi.
The circular, addressed to ministers, permanent secretaries, heads of extra-ministerial departments, chief executives of government agencies, accounting officers and federal pay officers, outlined fresh operational guidelines for implementing the 2026 capital budget.
According to the Accountant-General, the directive became necessary following widespread violations of the Public Procurement Act, 2007, and other financial regulations governing public expenditure.
He noted that the government observed persistent cases of non-compliance with existing procurement procedures, resulting in financial commitments that lacked the required approvals and funding.
“Further to the Treasury Circular captioned ‘Revised Policy on Cash Management and Bottom-Up Cash Plan Operational Guidelines,’ it has become necessary to strengthen and deepen the implementation of the policy sequel to the observed non-compliance with the Public Procurement Act, 2007, and other extant laws and regulations,” the circular stated.
It added that the new measures are intended to ensure full compliance with government financial policies and improve the execution of capital projects.
Under the revised guidelines, no Ministry, Department or Agency is permitted to issue a letter of award, sign a contract or incur any financial obligation without first obtaining a Warrant or an Authority to Incur Expenditure.
The government believes the directive will curb indiscriminate contract awards, improve budget implementation, promote accountability and reduce the growing number of abandoned public projects across the country.
