Budget for 2025: Ministries face difficulties as the Accountant-General halts requests for funds

The Federal Government is considering the option to prolong the 2025 budget into 2026 due to sluggish project execution, delays in procurement, and a halt in the cash-planning portal that have caused numerous projects to be inactive approximately eight months into the fiscal year.

This potential extension was discussed during a stakeholders' meeting that took place in Abuja on Wednesday, organized by the Office of the Accountant-General of the Federation to assess advancements and obstacles in the execution of the extended 2024 capital budget as well as the 2025 capital budget under the Bottom-Up Cash Planning Policy.

According to reports from The PUNCH, before any contracts can be finalized, various ministries, departments, and agencies (MDAs) are required to submit a monthly cash plan on an online platform managed by the OAGF. This cash plan details which projects will receive funding and the necessary amounts. The OAGF reviews and merges these plans into a nationwide cash plan.

After consolidation, this plan is forwarded to the Ministry of Finance for authorization. Once granted, the ministry issues warrants—official approvals for spending—which are sent back to the OAGF to be entered into the same system. Subsequently, MDAs are allowed to upload their payment plans, leading to the direct release of funds to contractors, suppliers, or beneficiaries.

However, the portal has been inaccessible since May for uploading cash plans related to 2025 expenses and contracts. In the absence of cash plans, warrants cannot be issued; without warrants, payment plans cannot be entered; and without those plans, funds cannot be disbursed.

A director-general from a health agency mentioned to The PUNCH that "we have been raising concerns about the blocked portal as none of us have been able to upload our cash plans since May."

During the meeting, Shamseldeen Ogunjimi, the Accountant-General of the Federation, explained that the BUCPP was created to ensure fiscal responsibility by mandating warrants or Authorities to Incur Expenditure before any commitments are made. He criticized several MDAs for violating the Public Procurement Act 2007 and other guidelines by awarding contracts just because they were included in the budget, ignoring the necessity of cash availability.

He further criticized the practice of heavily loading cash needs with personnel costs and mobilization fees, while leaving important ongoing and completed projects without funding. This situation, he highlighted, has compelled some contractors to seek loans from banks at elevated interest rates, neglecting priority government projects.

“Without a warrant, no MDA is permitted to sign new contracts or process any capital payments in the GIFMIS platform,” Ogunjimi cautioned. He noted that cash plans submitted from February to March for the extended 2024 budget had already received warrants, and payments authorized but not utilized are now being finalized.

Ogunjimi reassured those present that previously recorded commitments would be honored. “For those who have contracts awarded, these contracts have been placed on the GIFMIS platform, and cash has been allocated. It is now a liability for the government that we are prepared to fund, and we will fund them,” he stated.

He emphasized that once the portal is reopened, any new entry will be considered a fresh contract and must adhere to the updated procedures. He encouraged accounting officials to initiate payments where warrants have been issued, asserting that there are sufficient funds in the Capital Development Fund to manage these expenses.

Supporting the Treasury's position, Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, highlighted that “no award letters should be issued, no contracts signed, and no financial commitments made until the necessary warrants and AIEs covering the total or committed amount are properly released.”

Edun explained that the purpose of the BUCPP is to enhance the payment process by making it “more stringent, more open, more responsible,” which involves paying contractors and suppliers directly, eliminating intermediaries.

He recognized the importance of fulfilling current obligations; however, he emphasized the necessity of redirecting new funds toward productive investments that would foster economic growth, create jobs, and help lift many out of poverty. “We only spend what we earn,” he cautioned, insisting that the outdated practice of committing funds without proper approval must cease “immediately.”

In addition, Tanimu Yakubu, the Director-General of the Budget Office of the Federation, reported that Nigeria had forfeited nearly 60 percent of its gross oil revenue due to deductions from the Petroleum Industry Act 2022, which allocates 30 percent as management fees to the Nigerian National Petroleum Company Limited and another 30 percent to the Frontier Exploration Fund.

“Since the Act was implemented without new revenue streams to fill the gap, we lost a significant portion of what previously funded 80 percent of public expenditures,” Yakubu stated. He further noted that oil revenues have diminished even more in the first half of 2025 due to low prices and production shortfalls.

He added that the situation worsened because early in 2025, those revenues were used for the extended 2024 budget, obliging the government to categorize all spending into Categories A, B, and C. Yakubu mentioned that he has initiated efforts in the National Assembly to amend the PIA to recoup part of the lost revenue.