The Federal Government has cautioned Ministries, Departments and Agencies (MDAs) against awarding contracts without verified funding availability.
Wale Edun, the Finance Minister, handed down the caution during a stakeholders’ meeting organized by the Office of the Accountant General of the Federation (OAGF) on the 2025 capital budget in Abuja on Wednesday.
According to him, no legal financial commitments will be made unless the requisite warrants and Authorities to Incur Expenditure (AIEs) are issued beforehand.
“To be clear, contracts cannot be awarded, signed, or financially obligated without the full release of the necessary warrants and AIEs covering the committed amounts,” Edun stated.
He emphasized the government’s principle of living within its means, stressing that resources must be carefully invested in productive equipment and infrastructure to create employment and alleviate poverty.
He disclosed that previous financial inefficiencies, which cost the economy an estimated 5% of GDP, have been eliminated, leading to increased revenues flowing into the Federation Account.
The government is targeting a 7% annual economic growth rate—twice the current population growth—to promote sustainable and inclusive progress, he said.
Speaking, the Budget Office’s Director-General, Dr. Tanimu Yakubu, blamed the slow execution of the capital budget early this year on shortfalls in revenue, partly due to the Petroleum Industry Act (PIA) of 2022.
The legislation redirected a large portion of oil revenue to the Nigerian National Petroleum Company Limited (NNPC) and the Frontier Exploration Fund.
He said efforts underway to amend the Act through the National Assembly to recover these funds, adding that oil price fluctuations and production challenges have further restricted spending capacity.
Mr. Shamsuldeen Ogunjimi, the Accountant General, assured that genuine contract obligations registered in the Government Integrated Financial Management Information System (GIFMIS) will be fully honoured.
He said: “We aim to rebuild trust so that receiving a government contract letter once again signifies a binding commitment. Any obligation recorded in GIFMIS stands as a government liability, and we will ensure its funding.”
