FG Tightens Control Over Capital Budget Spending For 2025

The federal government has intensified its control over capital budget spending for 2025 by mandating that no Ministry, Department, or Agency (MDA) issue contract award letters without prior approval from the Minister of Finance.

Specifically, all contracts must be backed by a warrant or Authority to Incur Expenditure (AIE) issued by the finance minister. This is official confirmation of available funds before any financial commitment is made.

This directive, announced by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, during a stakeholder engagement meeting in Abuja, aims to ensure that government funds are focused on priority projects while enhancing transparency, accountability, and efficiency in capital budget execution. The policy also commits to immediate payments to contractors directly upon project completion, eliminating unnecessary intermediaries.

Edun explained that the measure aligned with the government’s cash management and bottom-up cash planning strategy, making payment processes more rigorous and transparent.

According to him, the issuance of warrants/AIEs is critical to prove that funds are available before contracts are awarded or financial obligations entered.

Highlighting ongoing reforms, the minister noted positive results such as increased disbursements to states and a current economic growth rate of 3.5 per cent while emphasising the ambitious target of achieving steady seven per cent annual growth to help lift millions out of poverty. He reinforced the need for practical, honest, and transparent spending as the foundation for these objectives.
The federal government also said the Debt Management Office (DMO) would have to source and provide the funds to finance the capital component of the 2025 national budget, which would further increase the nation’s debt stock.

“The Federation Account, STF, Funds and Revenue & Investment Departments in the OAGF shall provide the actual revenue inflows (FGN Share) for the period before the Federal Cash Management Committee meeting, while DMO shall provide the available funds for the period,” the director of funds in the Office of the Accountant General of the Federation, Steve Ehikhamenor, said on Wednesday in Abuja.

He made the disclosure in a presentation titled “Operational Process for the Implementation of Year 2025 Budget” at a stakeholder engagement meeting on the implementation of the 2025 budget.

The nation’s total public debt rose to N149.39 trillion in Q1 2025. Nigeria’s N54.99 trillion budget has a N14.1 trillion provision for capital expenditures and a deficit of about N15 trillion.

The 2024 capital budget is implemented with the revised bottom-up cash plan policy.

The Accountant General of the Federation, Shamsudeen Ogunjimi ,said, “No MDA shall issue letters of award, sign contracts, or enter into any financial obligations unless the corresponding Warrant/AIE covering the whole or committed portion of the contract sum has been duly released by the Honourable Minister of Finance and Coordinating Minister of the Economy (HMF&CME) to the Accountant-General of the Federation (AGF).

Ogunjimi said funds would continue to be disbursed centrally from the Treasury to beneficiaries, including contractors and employee payables, as part of the government’s commitment to ensure transparency and accountability in public finance management.

Also, the director general of the Bureau of Public Procurement, Adebowale Adedokun, has said his office will no longer issue relevant certificates to projects awarded without a warrant from the finance minister. “May I use this opportunity to re-emphasise to all of us that projects that have not been given adequate warrants or that have not been planned and submitted to BPP will no longer be issued with relevant certification,” the DG said yesterday.

The Bureau of Public Procurement restated its resolve to give priority to small and medium-scale enterprises. “We must give priority to the new direction for the Nigerian first policy and also ensure that those with vulnerabilities are given adequate attention in all procurement activities.”

AGF said all approved contracts concluded and uploaded on the GIFMISS platform would be funded immediately, whether for projects for 2024 or 2025 budgets. “We have money waiting for payment on the platform for those who have uploaded with a cash plan and consolidated, and a warrant has been issued by the Minister,” Ogunjimi stated while urging MDAs with warrants of approval to proceed to the application for disbursement.