The federal government ( FG) has also placed tighter capital budget expenditure controls for 2025, mandating that no Ministry, Department, or Agency (MDA) can go ahead and issue award letters for contracts without approval by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun. All contracts are now backed by a warrant or Authority to Incur Expenditure (AIE), serving as official confirmation of available funds prior to any financial disbursement being made.
Announcing the directive during a stakeholder engagement session in Abuja, Edun said the move would ensure that government money is funneled into high-priority projects and introduce greater transparency, accountability, and efficiency in the implementation of capital budgets. He also said contractors would now be paid directly upon job completion, eliminating unnecessary middlemen.
The policy also dovetails with the government’s bottom-up cash planning and cash management approach to make payment processes more robust and transparent. The finance minister outlined current reforms that have led to increased disbursements to states and a 3.5 per cent economic growth rate, as he reaffirmed the government’s vision of achieving 7 per cent growth every year to lift millions out of poverty.
With the ₦54.99 trillion 2025 budget of which ₦14.1 trillion goes to capital expenditure and a ₹15 trillion deficit the Debt Management Office (DMO) will borrow money to fund the capital component, which could balloon Nigeria’s public debt, which reached ₦149.39 trillion in Q1 2025.
Accountant General of the Federation, Shamsudeen Ogunjimi, reaffirmed that no MDA could enter into obligations or sign agreements without warrant/AIE from the finance minister. He further added all payments will be centrally disbursed from the Treasury to ensure transparency with signed contracts posted on the GIFMIS platform funded immediately when warrants are in place.
Director-General, Bureau of Public Procurement (BPP), Adebowale Adedokun, warned that his office would not grant certificates of award to projects awarded without a warrant, and the suggestion that BPP would place priority on small and medium-scale enterprises and the “Nigerian first” policy in procurement.
