Moves to End Abandoned Projects, Tighten Fiscal Discipline Across Federal Institutions
ABUJA — In a decisive move to restore fiscal discipline and eliminate the persistent scourge of abandoned government projects, the Federal Government has directed all Ministries, Departments and Agencies (MDAs) to stop awarding contracts without budgetary approval, adequate funding and the requisite financial authorisation.
The directive was contained in a Federal Treasury Circular dated July 31, 2026, signed by the Accountant-General of the Federation, Dr. Shamseldeen Ogunjimi. The circular instructed all MDAs to refrain from awarding contracts or entering into financial commitments unless such projects have approved budgetary provisions, a valid Warrant or Authority to Incur Expenditure (AIE), as well as adequate cash backing from the Federal Government.
The policy is widely regarded as one of the Federal Government’s strongest fiscal reforms in recent years, aimed at strengthening transparency, accountability and prudent management of public resources while ensuring that government projects are completed as planned.
According to the circular, no government agency is permitted to initiate procurement processes, award contracts or incur financial obligations outside the framework of the approved national budget. The directive is expected to halt the indiscriminate award of contracts that often result in abandoned projects and mounting public liabilities.
The government explained that the measure is designed to address the long-standing problem of projects being awarded without available funds, a practice that has left numerous infrastructure and development projects abandoned across the country despite billions of naira already committed.
Officials said the new directive will also reinforce strict compliance with the Public Procurement Act, 2007, improve budget implementation and promote responsible financial management across all federal institutions.
For years, Nigeria has struggled with incomplete and abandoned projects resulting from poor planning, inadequate funding and weak fiscal controls. Many of these projects have suffered repeated cost overruns, delayed completion and deterioration, depriving citizens of essential infrastructure and public services.
With the new directive, the Federal Government seeks to ensure that every contract awarded is backed by sufficient financial resources, thereby improving project execution, reducing waste and delivering greater value for public funds.
The circular further places greater responsibility on accounting officers and chief executives of MDAs, warning that they will be held accountable for any breach of the directive or any financial commitment made outside approved budgetary provisions.
Economic and public finance experts have welcomed the policy, describing it as a bold step toward restoring discipline in public expenditure and enhancing confidence in government financial management. They believe the reforms will help reduce wasteful spending, improve service delivery and ensure that taxpayers’ money is utilised more efficiently.
The latest directive aligns with the Tinubu administration’s broader economic reform agenda, which prioritises fiscal responsibility, transparency and efficient management of public resources as part of efforts to strengthen Nigeria’s economy and improve governance.
As implementation begins, all federal MDAs are expected to strictly comply with the new guidelines, with the Federal Government warning that any agency or official found violating the directive will face appropriate sanctions.
The policy is expected to usher in a new era of accountability in public procurement, ensuring that government contracts are awarded only when adequate budgetary provisions and funding are in place, thereby safeguarding public resources and accelerating the delivery of critical national development projects.
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