Abandoned Projects: Federal Government Bars Ministries From Awarding Unfunded Contracts

The Federal Government has directed all Ministries, Departments and Agencies (MDAs) to stop awarding contracts or entering into financial commitments without first obtaining budgetary approval and adequate cash backing.

The directive was contained in a Federal Treasury Circular dated July 31, 2026, signed by the Accountant-General of the Federation, Dr. Shamseldeen Ogunjimi, and addressed to ministers, permanent secretaries, heads of government agencies, accounting officers and federal pay officers.

According to the circular, the measure became necessary following repeated cases of non-compliance with the Public Procurement Act, 2007, and other financial regulations governing public spending.

The Accountant-General stated that no MDA is permitted to issue letters of award, sign contracts or incur financial obligations unless it has obtained a valid Warrant or Authority to Incur Expenditure (AIE) covering the entire contract value or the committed portion.

The circular also directed MDAs to generate and attach copies of Warrants or AIEs from the Government Integrated Financial Management Information System (GIFMIS) as proof that funds are available before contracts are awarded or payments processed.

It further warned that financial commitments, including purchase invoices and employee-related obligations, must not exceed the value of available warrants, stressing that agencies must strictly operate within approved funding limits.

In addition, the Bureau of Public Procurement (BPP) was instructed to process requests for “No Objection” certificates only when supported by valid Warrants or AIEs.

The Accountant-General reminded accounting officers that awarding contracts without budgetary provision and cash backing constitutes an offence under the Independent Corrupt Practices and Other Related Offences Commission (ICPC) Act, 2000.

To improve capital budget implementation, all MDAs were directed to submit annual and quarterly cash plans to the Office of the Accountant-General. The first annual and quarterly plans were scheduled for submission by July 31, 2026, while subsequent quarterly plans must be submitted on or before the 15th day of the first month of every new quarter.

The circular also instructed agencies to prioritise projects in line with the Federal Government’s development objectives, while the Cash Management Technical Committee will continue reviewing implementation plans and advising the Federal Cash Management Committee on priority projects.

The government said the directive is expected to strengthen fiscal discipline, improve transparency, reduce abandoned projects, prevent the accumulation of unpaid contractual liabilities, and ensure that public projects are executed only when adequate funding is available.