The Federal Government has introduced stricter controls over the implementation of the 2026 capital budget. Under the new directive, Ministries, Departments and Agencies (MDAs) cannot award contracts, sign agreements, or incur financial obligations without approved expenditure warrants and cash backing.
The directive is contained in a Federal Treasury Circular dated July 31, 2026, signed by the Accountant-General of the Federation, Shamseldeen Ogunjimi. The circular was addressed to ministers, permanent secretaries, service chiefs, the Governor of the Central Bank of Nigeria, the Clerk of the National Assembly, and other heads of federal institutions.
Strict Procurement Controls and ICPC Penalties
According to the circular, MDAs can no longer issue letters of award or execute contracts unless they have received the relevant Warrant or Authority to Incur Expenditure (AIE) covering the contract value. This is in compliance with Financial Regulations 318 and 415, which state that no expenditure shall be incurred except on the authority of a Warrant or AIE.
To ensure compliance, MDAs must download and attach copies of their Warrants or AIEs generated from the Government Integrated Financial Management Information System (GIFMIS) as evidence of funding. Furthermore, the Bureau of Public Procurement (BPP) has been directed to process only requests for Certificates of No Objection that are backed by valid Warrants or AIEs.
The circular warned accounting officers that awarding or signing contracts without budgetary provision, approval, and cash backing constitutes an offence under the ICPC Act 2000. Financial commitments, including purchase invoices and employee payables, must be strictly restricted to available uncommitted warrant balances.
Mandatory Cash Plans and Project Prioritisation
The Federal Government has also directed all MDAs to submit annual cash plans for their 2026 capital budgets to the Office of the Accountant-General of the Federation. The annual cash plans, commencing from July 1, 2026, were expected to be submitted in both hard and soft copies on or before July 31, 2026, alongside the first quarterly cash plan.
Subsequent quarterly cash plans must be submitted on or before the 15th day of the first month of every new quarter. Accounting officers, directors of finance and accounts, and heads of internal audit must prioritise projects based on available Warrants and AIEs rather than approved budget allocations alone.
The Cash Management Technical Committee will continue to review budget implementation plans. The committee will advise the Federal Cash Management Committee on project priorities in line with government objectives.
Context of the N68.32 Trillion 2026 Budget
In April 2026, President Bola Tinubu signed the 2026 Appropriation Bill into law, approving a total expenditure of N68.32 trillion. The President also approved a bill extending the implementation period of the capital component of the 2025 budget from March 31, 2026, to June 30, 2026.
The Federal Government increased its planned borrowing for 2026 to N29.20 trillion, representing an N11.31 trillion increase compared to the initial projection of N17.89 trillion in the December 2025 Abridged Budget Call Circular. This adjustment follows an expansion in the fiscal deficit, which is now estimated at N31.46 trillion, while total revenues are projected at N36.87 trillion.
