Fed Govt bars ministries from awarding unfunded contracts to curb abandoned projects

The Federal Government has directed all Ministries, Departments, and Agencies (MDAs) to stop awarding contracts that do not have budgetary approval and adequate cash backing, as part of efforts to address the growing challenge of abandoned projects across the country.

The directive is aimed at strengthening fiscal discipline, improving project implementation, and ensuring that government contracts are awarded only when sufficient funds are available for execution. Officials said the move will help reduce delays, eliminate wasteful spending, and restore public confidence in the management of government projects.

Under the new policy, MDAs are required to obtain the necessary budgetary approvals and confirm the availability of funding before initiating or awarding any contract. The government stressed that contracts without proper financial backing often lead to abandoned projects, cost overruns, and unnecessary burdens on public finances.

The Federal Government noted that the measure forms part of broader public financial management reforms designed to enhance accountability, transparency, and value for money in the use of public resources.

Stakeholders have welcomed the policy, describing it as a significant step toward improving infrastructure delivery, reducing the number of abandoned projects nationwide, and promoting prudent management of government funds.