•Minister of Finance and Coordinating Minister of the Economy, Wale Edun
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has directed Ministries, Departments, and Agencies to ensure they obtain warrants and Authority to Incur Expenditure before committing to any financial obligations or signing contracts.
He noted this directive during the Stakeholders’ Engagement on the Implementation of the 2025 Capital Budget and Related Issues, organised by the Office of the Accountant-General of the Federation in Abuja on Wednesday.
Edun underlined the importance of a rigorous policy aimed at enhancing transparency and accountability in government spending, reports The PUNCH.
The policy, he explained, ensures that payments to suppliers, contractors, and other government beneficiaries are made directly into their nominated accounts, bypassing intermediaries.
He stressed that no contracts should be signed or financial commitments made unless corresponding warrants and AIEs are in place.
“Henceforth, warrants/AIEs will be issued to MDA prior to legal commitment to serve as evidence of funds available for award of contracts or processing of payment for ongoing and completed projects.
“For the avoidance of doubt, you are to ensure that no letter of award is issued, contract signed, or enter into any financial obligation unless the corresponding Warrants/AIEs covering the full or committed portion of the contract sum have been duly released,” Edun said.
The minister also reflected on the substantial increase in government revenue under the leadership of President Bola Tinubu.
While acknowledging the progress, Edun noted that the next challenge is ensuring these funds are efficiently invested in projects that stimulate economic growth.
“The critical thing is that those extra resources are channelled diligently, skillfully, and with full responsibility into areas that grow the economy,” he stated.
He further praised the government’s efforts in removing fiscal distortions that were previously costing Nigeria 5 per cent of its GDP, resulting in improved revenue flow.
However, he emphasised that government spending must now be targeted towards investments that foster long-term growth, create jobs, and lift millions out of poverty.
Also speaking at the event, the Accountant-General of the Federation, Shamseldeen Ogunjimi, called for enhanced adherence to the Federal Government’s cash management policy to ensure better execution of capital projects.
In his keynote address, Ogunjimi highlighted the importance of efficient and prudent cash management as a crucial factor for development in Nigeria.
He raised concerns over the continued non-compliance with the Public Procurement Act, 2007, and other key regulations by Ministries, Departments, and Agencies.
Ogunjimi stressed the importance of adhering to financial guidelines to ensure the efficient use of limited government resources.
The Accountant-General reflected on the challenges posed by MDAs awarding contracts based solely on budgetary provisions without aligning with the government’s monthly cash flow projections.
This, he said, leads to financial commitments that exceed available cash resources, which ultimately hinder the government’s budget implementation plans.
“Part of the policy directive is the finalisation of capital payments by the Office of the Accountant General of the Federation to the beneficiaries after authorisation by the Accounting Officers,” Ogunjimi said.
However, he noted that a significant number of MDAs have failed to include ongoing and completed projects in their cash needs uploads, prioritising employee payables and mobilisation fees instead.
This misalignment, Ogunjimi explained, has led some contractors to seek intervention from the Federal Ministry of Finance or the Office of the Accountant General of the Federation, as they had to borrow funds at high interest rates to continue projects.
Further compounding the issue, Ogunjimi pointed out that government priority projects are often neglected despite clear guidance from the Budget Office of the Federation.
He emphasised that accounting officers must take full responsibility for providing the leadership necessary to ensure these projects are completed in line with government objectives.
Ogunjimi further outlined several measures that have been implemented to streamline the cash management process, following directives from the Minister of Finance and Coordinating Minister of the Economy, Wale Edun.
These include the finalisation of warrants for cash plans submitted between February and March 2025, as part of the extended 2024 budget.
The OAGF has also consolidated all outstanding cash plans and is in the process of finalising payments for unutilised warrants.
To strengthen the operational framework, Ogunjimi outlined new procedures that MDAs must follow, including submitting their extended 2024 budget implementation plans within two weeks and submitting a prioritised 2025 annual budget implementation plan.
He also reiterated that warrants and AIEs would now guide MDAs on their spending limits.
“Without which, no MDA is allowed to award new contracts or process any capital payments in the GIFMIS platform,” he emphasised.
