FG Blocks MDAs from Issuing Contracts Unless Finance Ministry Signs Off

Abuja, August 13, 2025 – The Federal Government has imposed a strict new rule: no Ministry, Department, or Agency (MDA) may issue a contract award letter unless it’s backed by explicit approval from the Minister of Finance. That approval must be in the form of a warrant or an Authority to Incur Expenditure (AIE), as announced by Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, during a stakeholder session convened by the Office of the Accountant-General of the Federation.

The directive aims to ensure that project funding is secured up front, enabling prompt payment to contractors upon completion and eliminating unnecessary delays. It also supports a transparent, need-based budgeting system aligned with the government's cash management and bottom-up planning framework.

Edun emphasised that this measure strengthens the rigour and accountability of contract payments. He cited recent economic improvements, including 3.5% GDP growth and increased disbursements to states, but underlined that the administration is targeting a sustained 7% growth rate to significantly reduce poverty levels.

The Accountant-General of the Federation, Samseldeen Ogunjimi, added that regardless of budgetary allocation, MDAs must now secure a warrant or AIE covering the contracted amount before issuing or signing any new agreement. Contracts issued previously via proper authorisation remain unaffected