The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, has called for transparency in the implementation of capital budgets by the Ministries, Departments and Agencies (MDAs) of government.
Mr. Edun, made the call on Wednesday while declaring open the Stakeholders Engagement/Sensitisation Meeting on the Implementation of the extended 2024 and 2025 Capital Budgets under the Bottom-Up Cash Planning Policy.
The landmark event which was organised by the Office of the Accountant-General of the Federation (OAGF) in Abuja, brought together Permanent Secretaries/Accounting Officers, who are critical stakeholders of the Federal Government public finance management.
The Minister recalled that the Federal government initiated the implementation of the Cash Management and Bottom-Up Cash Planning Policy as a basis for the execution of 2024 capital budget to provide set of rules, and general guidance for the conduct of Government business in planning and management of cash resources for effective and efficient service delivery.
Noting that efficient and prudent cash management is at the center of any meaningful development particularly, in a developing economy like Nigeria.
He stated that henceforth, Warrants/AIEs would be issued to MDAs prior to legal commitment to serve as evidence of funds available for award of contracts or processing of payment for ongoing and completed projects.
“For the avoidance of doubt, you are to ensure that no letter of award is issued, contract signed, or enter into any financial obligation unless the corresponding Warrants/AIEs covering the full or committed portion of the contract sum has been duly released.
“It is therefore, a call for you all to prudently manage the limited resources that will be allocated to your MDA as well as optimize revenue realization as they fall due. In addition, necessary controls must be put in place to avoid discretionary spending,” he noted.
Edun informed that the Accountant General of the Federation has been directed to develop a new business process that would ensure that MDA access its Warrants/AIEs by downloading and attaching the same as evidence of funds availability during tender board meetings.
However, he added that disbursement of funds to beneficiaries shall continue to be done centrally in the Treasury.
He also disclosed that the Federal Government is putting in place measures to fund the extended 2024 and 2025 capital budgets as they fall due particularly, the priority projects of the government.
“This meeting is scheduled to align your peculiarities with the new process as we aggressively progress in the implementation of the budgets,” he added.
In his Opening Remarks, Accountant-General of the Federation, Shamseldeen Ogunjimi, said the programme was designed to address some of the challenges faced in the past months and to interact with the stakeholders to obtain some relevant inputs from the operators that may aid in the implementation of the new process.
He explained that the implementation of the revised Bottom-up Cash Planning (BUCPP) Policy was mired by gross non compliance with Public Procurement Act, 2007 and other extant regulations thereby creating financial commitments far beyond the monthly projected cash flows of the federal government.
He however, noted that the government has reviewed the trends where MDA award contracts solely on the basis of budgetary provisions and the resulting consequences which are against the annual budget implementation plan from which cash plans are generated and the funding plans of the government.
“More worrisome is the situation where the cash needs uploaded by most MDA are employee payables and mobilization fees leaving out ongoing and completed projects provided in the budget.
“This has forced some contractors to either approach the federal Ministry of finance or OAGF for intervention because the funds they claimed used to execute the projects were borrowed from banks at a high interest rate.
“Furthermore, priority projects of the government are left unattended despite the specific guidance given by the Budget office of the Federation. It is our responsibility as Accounting Officers to provide the needed leadership and control necessary for the achievement of objectives,” he said.
He informed that sequel to the directive of the HMFCME and recommendation of the Federal Cash Management Committee, the following have been taken:
“All cash plans submitted between February and March 2025, which were part of the extended 2024 budget have been warranted in line with the revised cash management policy.
“The OAGF has consolidated all the outstanding cash plans already submitted for warrants.
“All payments request for unutilized warrants, authorized and forwarded to the Treasury are being finalized,” he said.
According to him, the new operational process requires MDA to henceforth, note and abide by the following:
“Prepare and submit to the OAGF extended 2024 budget implementation plan in line with government priority within two (2) weeks;
“Prepare and submit to the OAGF 2025 annual budget implementation plan separately prioritizing the projects;
“Warrants/AIEs will be issued to guide MDA on its spending limit at every given time. Without which, no MDA is allowed to award new contracts or process any capital payments in the GIFMIS platform.
“Copy of Warrants/AIEs shall be downloaded and attached to procurement documents as evidence of fund availability before contract award.
“The roles of the Accounting Officers in the GIFMIS platform have been reviewed as requested to ease the numerous tasks. Alternative provisions have been provided for desiring accounting Officers,” he said.
