The Nigerian government has unveiled stricter fiscal guidelines to improve transparency and accountability in managing its 2025 capital budget, following the discovery of irregularities in past spending practices. At a stakeholders’ briefing with heads of ministries, departments, and agencies (MDAs), the Office of the Accountant-General of the Federation (OAGF) outlined new cash management protocols aimed at curbing wasteful expenditure and prioritizing critical projects.
Accountant-General Shamsudeen Ogunjimi announced the rollout of a “bottom-up cash planning” system, which mandates meticulous alignment of government spending with available resources. The policy requires MDAs to secure funding warrants before awarding contracts or initiating payments, ensuring financial commitments are backed by verifiable funds. “No letter of award should be issued unless the corresponding warrant has been released,” Ogunjimi stressed, addressing concerns over agencies bypassing procurement laws, inflating costs, and diverting funds to new projects while neglecting ongoing ones.
The reforms come amid revelations that some MDAs awarded contracts based solely on budget allocations, often without adhering to Nigeria’s Public Procurement Act (2007) or Fiscal Responsibility Act (2007). Instances of premature transfers to contractors’ accounts and unreported revenue were also flagged. “This government will not fold its hands while institutions ignore fiscal regulations,” Ogunjimi warned, urging agencies to prioritize completing existing projects and remitting revenue to the treasury.
Finance Minister Wale Edun tied the measures to broader efforts to align spending with actual income. “Payments will go directly to service providers, eliminating intermediaries and ensuring accountability,” he said, emphasizing that the N10.5 trillion (approximately $7 billion) carried over from the 2024 capital budget to 2025 necessitates rigorous oversight. Steve Ehikhamenor, OAGF’s Director of Funds, clarified that the rollover reflects delayed 2024 projects now incorporated into next year’s budget, increasing funding needs but streamlining execution timelines.
Analysts note the policy shift responds to long-standing critiques of Nigeria’s budget implementation, where delayed releases and opaque processes often hinder infrastructure delivery. By requiring pre-approved warrants and stricter adherence to procurement laws, authorities aim to reduce corruption risks while improving public trust. The success of these measures, however, hinges on consistent enforcement across Nigeria’s vast bureaucracy—a challenge past administrations have struggled to meet.
The reforms underscore the government’s push to stabilize public finances amid economic pressures, including inflation and currency volatility. For citizens, the stakes are high: efficient budget execution is critical to upgrading roads, power grids, and healthcare systems in Africa’s most populous nation. As MDAs adapt to the new framework, scrutiny will focus on whether transparency pledges translate into tangible service delivery.
