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As part of efforts to strengthen fiscal responsibility and ensure prudent implementation of the 2025 national budget, the Federal Government has issued a new set of financial control directives, banning all Ministries, Departments, and Agencies (MDAs) from entering into contracts denominated in foreign currency.
According to the 2025 Appropriation Act Implementation Guidelines, MDAs are now mandated to conduct all contractual transactions exclusively in Nigerian Naira.
The directive clearly states that no MDA is permitted to engage in any foreign currency-denominated contract without first obtaining formal approval from the Honourable Minister of Finance and Coordinating Minister of the Economy.
The guideline, issued by the Budget Office of the Federation, reiterates: “MDAs are to ensure that their contracts are wholly denominated in Nigerian Naira. No MDA is authorised to enter a contract denominated in any foreign currency without the prior approval of the Honourable Minister of Finance and the Coordinating Minister of the Economy.”
To enhance transparency and promote accountability in public expenditure, the directive also introduces stringent reporting obligations. All MDAs are now required to submit monthly Budget Performance Reports to the Budget Office of the Federation using a designated format. These reports must be submitted no later than the 15th day of the subsequent month.
Failure to comply with this requirement will result in serious consequences: non-compliant MDAs will be excluded from future capital and recurrent budget disbursements until they meet reporting expectations. This measure is designed to ensure that budget releases are directly linked to actual progress and performance in project execution.
The government is also intensifying efforts to enhance the integrity of personnel cost management. The Budget Office has committed to reducing the number of MDAs not yet integrated into the Integrated Personnel and Payroll Information System (IPPIS).
To achieve this, the Office will conduct monthly and quarterly reviews of nominal rolls to identify and remove irregular payroll entries, duplicate allowances, and any other unjustified financial commitments. Additionally, MDAs have been barred from initiating payments for promotions or salary arrears directly through IPPIS.
Instead, such payments must be channeled through the Committee on Payment of Promotions and Salary Arrears, in accordance with an existing circular issued by the Ministry of Budget and Economic Planning dated December 17, 2020.
Furthermore, MDAs must now submit monthly reconciliations of all non-regular allowances received, clearly stating how such funds were utilised and whether any surplus remains. These reports are subject to audit scrutiny, and the Auditor-General of the Federation is expected to monitor compliance as part of the broader audit process.
To avoid unsanctioned increases in personnel costs, the guideline prohibits MDAs from undertaking any action that could raise wage bills within the fiscal year. This includes new recruitments, unapproved payments, or staff replacements without formal clearance.
Severe penalties will be applied to any accounting officer or head of agency who flouts this directive. Moreover, a new recruitment policy has been instituted to ensure that MDAs comply with the statutory ratio between academic and non-academic staff and the mandatory 5% job allocation for persons with disabilities.
All future applications for financial clearance or establishment of new positions must include details confirming compliance with these provisions.
The federal government also addressed tax-related matters, cautioning that no MDA is authorised to grant tax waivers or exemptions to contractors. Any such exemptions must follow the appropriate legal and fiscal processes and be officially approved through recognised channels.
Additionally, MDAs with a history of frequent tax expenditures—whether by granting exemptions, failing to enforce tax laws, or waiving statutory obligations—are instructed to operate strictly within the annual tax expenditure cap set out in the 2025 Appropriation Act.
On development partner interventions, the guideline outlines that all requests for assistance from international partners must be routed through the International Cooperation Department (ICD) within the Ministry of Budget and Economic Planning.
Any support—whether in cash or kind—must be thoroughly documented and reported monthly to both the ICD and the Office of the Accountant-General of the Federation. This is part of the government’s strategy to institutionalise transparency, align external support with national priorities, and maintain budgetary discipline.