The Federal Government has slammed the brakes on the reckless award of contracts, warning Ministries, Departments and Agencies (MDAs) that no money means no contract.
In a sweeping directive aimed at ending the scourge of abandoned projects, the government barred all MDAs from awarding contracts, signing agreements or making any financial commitments without first securing budget approval and cash backing.
The tough order was contained in a Federal Treasury Circular dated July 31, 2026, signed by the Accountant-General of the Federation, Dr. Shamseldeen Ogunjimi, and sent to ministers, permanent secretaries, heads of agencies and other top government officials.
The Accountant-General said the action became necessary after authorities uncovered widespread violations of the Public Procurement Act and other financial regulations.
Under the new rules, no ministry or agency can issue a contract award letter, sign a contract or incur any financial obligation unless the Minister of Finance has released the required Warrant or Authority to Incur Expenditure (AIE).
The circular also directed MDAs to attach copies of approved Warrants or AIEs generated through the Government Integrated Financial Management Information System (GIFMIS) as proof that funds are available before contracts are awarded or payments processed.
It further warned that agencies must never commit to spending more than the funds available, stressing that purchase orders, invoices and other financial obligations must remain within approved budget limits.
In another major move, the Bureau of Public Procurement was ordered to process only applications for “No Objection” certificates backed by valid Warrants or AIEs.
The Accountant-General reminded accounting officers that awarding contracts without budgetary provision, approval and cash backing is a criminal offence under the ICPC Act 2000.
To tighten spending controls, the government also directed all MDAs to submit annual and quarterly cash plans for their capital projects, while ensuring projects are prioritised in line with the Federal Government’s policy objectives.
The Cash Management Technical Committee will continue monitoring implementation and advising on priority projects, while accounting officers and directors of finance will be held responsible for prudent cash management in their agencies.
The latest crackdown reinforces the Tinubu administration’s drive for stricter fiscal discipline, transparency and value for money, with officials hoping the tougher rules will curb unpaid debts, stop wasteful spending and finally reduce the growing number of abandoned government projects.
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