The Federal Government has directed all Ministries, Departments and Agencies (MDAs) to stop awarding contracts or entering into financial commitments without first obtaining the required budgetary approval and cash backing.
The directive is aimed at strengthening fiscal discipline, improving budget implementation and reducing the growing number of abandoned public projects across the country.
The new policy was contained in a Federal Treasury Circular dated July 31, 2026, and signed by the Accountant-General of the Federation, Dr. Shamseldeen Ogunjimi.
The circular was addressed to ministers, permanent secretaries, heads of extra-ministerial departments and agencies, accounting officers and federal pay officers.
According to the Accountant-General, the directive became necessary following widespread violations of the Public Procurement Act 2007 and other financial regulations governing public expenditure.
The government said stricter implementation of its revised cash management policy is essential to promote transparency, accountability and prudent management of public funds.
Under the new guidelines, no MDA is permitted to issue a letter of award, sign a contract or incur any financial obligation without first securing a valid Warrant or Authority to Incur Expenditure (AIE).
The Office of the Accountant-General also instructed MDAs to attach copies of Warrants or AIEs generated through the Government Integrated Financial Management Information System (GIFMIS) before contracts can be processed or payments approved.
The circular further directed that all financial commitments, including purchase invoices and employee-related obligations, must remain within available and uncommitted warrant balances.
It warned that no financial commitment should exceed the value of the approved Warrant or AIE available to the concerned agency.
The government also instructed the Bureau of Public Procurement (BPP) to process requests for "No Objection" certificates only when they are supported by valid Warrants or AIEs.
According to the circular, accounting officers who award contracts without adequate funding risk violating provisions of the Independent Corrupt Practices and Other Related Offences Commission (ICPC) Act 2000.
To improve budget execution, all MDAs have been directed to prepare and submit annual and quarterly cash plans for their capital projects to the Office of the Accountant-General.
The circular stated that annual cash plans, together with the first quarterly cash plan, were to be submitted on or before July 31, 2026, while subsequent quarterly plans must be submitted before the 15th day of the first month of every new quarter.
Government agencies have also been instructed to prioritise projects that align with the Federal Government's policy objectives and available financial resources.
The Cash Management Technical Committee will continue reviewing implementation plans and advising the Federal Cash Management Committee on priority projects requiring funding.
Accounting officers and directors of finance across federal institutions were reminded that they remain personally responsible for ensuring prudent cash management within their organisations.
The Accountant-General urged chief executives, finance directors, internal auditors and other relevant officials to ensure strict compliance with the circular across all government institutions.
The latest directive reinforces the Federal Government's ongoing fiscal reforms designed to improve transparency, prevent the accumulation of unpaid contractual liabilities and ensure that projects are awarded only when sufficient funding is available.
Officials believe the policy will significantly reduce abandoned projects while promoting greater value for money, accountability and efficiency in the execution of Nigeria's capital budget.