The Federal Government has banned all Ministries, Departments, and Agencies from issuing contract award letters without prior approval from the Minister of Finance. The approval must come in the form of a warrant or an Authority to Incur Expenditure. The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, announced the policy in Abuja during a stakeholder meeting organised by the Office of the Accountant-General of the Federation. The event gathered permanent secretaries and accounting officers from across government.
Edun explained that the new measure will ensure funds are available before any contract is awarded. It will also make it easier to pay contractors as soon as projects are completed. The reform is designed to improve transparency, prevent delays, and ensure that funding goes only to priority projects. He added that the new approach supports the government’s cash management and bottom-up planning policy. Under the system, payments will go directly to contractors and service providers without intermediaries.
According to the minister, the changes will make contract payments more rigorous, transparent, and accountable. He noted that current government reforms are producing results, with GDP growth at 3.5% and increased allocations to states. However, the administration aims for steady and inclusive growth of 7% per year to lift millions of Nigerians out of poverty.
The Accountant-General of the Federation, Samseldeen Ogunjimi, warned against awarding contracts based only on budgetary provisions. He said some MDAs still transfer funds before contracts are executed. From now on, no contract may be awarded or signed without a warrant or AIE covering the full or committed portion of the contract sum. Ogunjimi assured that contracts already awarded through the proper process will still be funded, while the new rule will apply to all future agreements.
