Federal authorities initiate discussions with departmental agencies regarding the execution of the budget for the year 2025
The Office of the Accountant-General of the Federation (OAGF) has announced the implementation of a cash management and bottom-up cash planning policy for the execution of the 2025 Capital Budget. This policy aims to ensure that the government spends what it has earned and provides rules and guidelines for the conduct of government agencies for planning and managing cash resources for effective service delivery.
At a stakeholders' engagement meeting with chief executives of Ministries, Departments, and Agencies (MDAs) on Wednesday, the AGF, Mr Shamseldeen Ogunjimi, emphasised the need for compliance with policy directives to mitigate lapses that necessitated the revision of the initial framework. The meeting also discussed transitioning from the 2024 budget to the 2025 budget, with a total amount of N10.5 trillion automatically added to the 2025 capital budget from the 2024 budget.
Under the new policy, payment will go directly from the government to the person who has provided services, and the policy is designed to provide strategies for cash flow planning and management, ensuring immediate payment to end-beneficiaries. The bottom-up policy also aims to make the system of payments more rigorous, transparent, and accountable, addressing issues such as non-realisation of targeted revenue and failure to remit revenue generated to the treasury.
The OAGF called on MDAs to comply with the Public Procurement Act 2007, the Fiscal Responsibility Act 2007, and other regulations for the execution of the 2025 capital budget. The policy now requires warrants to be issued to MDAs prior to legal commitment for contract awards or payments, and no letter of award or contract signing should occur without the corresponding warrant.
Efficient cash management is considered crucial for meaningful development, particularly in a developing economy. Accounting officers of MDAs are urged to prudently manage limited resources and optimise revenue realisation. The goal is to ensure that the government spends what it has earned, optimising the use of resources for effective service delivery.
In conclusion, the Federal Government's cash management and bottom-up cash planning policy for the 2025 Capital Budget is a significant step towards improving the transparency, accountability, and efficiency of government spending. By ensuring that payments go directly to service providers and that warrants are issued prior to contract awards or payments, the policy aims to create a more rigorous and effective system for managing the government's cash resources.
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