Abuja: The Office of the Accountant-General of the Federation (OAGF) engaged Federal Government accounting officers on new modalities to transition from the 2024 budget to the 2025 budget. This was part of a stakeholders’ engagement with chief executives of Ministries, Departments, and Agencies (MDAs) focusing on the implementation of the 2025 capital budget and related issues.
According to News Agency of Nigeria, the Accountant-General of the Federation, Mr. Shamseldeen Ogunjimi, announced that the Federal Government has initiated the implementation of a cash management and bottom-up cash planning policy for the execution of the 2025 Capital Budget. Ogunjimi highlighted that the policy aims to provide a set of rules and guidelines to enhance the planning and management of cash resources for effective service delivery.
Efficient cash management is crucial for meaningful development, particularly in a developing economy. The policy is designed to offer strategies for cash flow planning and management, ensuring that inflows are realised and public expenditure provides value for money. It also aims to ensure immediate and guaranteed payments to end-beneficiaries.
During the policy implementation, it was noticed that some MDAs awarded contracts based on budgetary provisions without considering external laws and regulations. Ogunjimi noted a tendency to award new contracts instead of completing ongoing critical projects and transferring funds to vendors’ accounts before contract execution. Additionally, there were issues with non-realisation of targeted revenue and failure to remit generated revenue to the treasury.
The government is determined to enforce compliance with existing laws and regulations in the award and execution of capital budgets. Ogunjimi urged accounting officers to adhere to policy directives to address lapses that prompted the revision of the initial framework. Warrants will now be issued to MDAs before legal commitments to confirm funds availability for contracts or payment processing. Ogunjimi emphasized the importance of prudent resource management and revenue optimisation.
Mr. Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, reiterated the need for the government to spend within its earnings. The Federal Government’s bottom-up policy aims to make payment systems more rigorous, transparent, and accountable, ensuring direct payments from the government to service providers.
Mr. Steve Ehikhamenor, Director of Funds at OAGF, stated that all 2024 financial commitments of the MDAs have been transferred to 2025, with the total capital amount of N10.5 trillion from 2024 automatically added to the 2025 capital budget.