FG bans dollar contracts, bars MDAs from initiating payment for promotion, salary arrears on IPPIS

The Federal Government has barred all Ministries, Departments, and Agencies (MDAs) from entering into contracts denominated in foreign currency, introducing a series of strict fiscal control measures under the 2025 Appropriation Act Implementation Guideline.

Under the new directive, all contracts are now required to be fully quoted in Naira unless special approval is granted.

“MDAs are to ensure that their contracts are wholly denominated in Nigerian Naira,” the guideline stated. “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.”

The guideline, issued by the Budget Office of the Federation, also imposes tighter reporting and compliance conditions. MDAs are now required to submit monthly Budget Performance Reports in a specified format no later than the 15th of the following month. Failure to comply will disqualify them from receiving further capital or recurrent budget allocations.

This is intended to tie funding more closely to tangible project execution and ensure fiscal discipline.

In a bid to rein in personnel costs, the Budget Office has also taken steps to clean up the government’s payroll. It said it would intensify monthly and quarterly audits of nominal rolls to identify and eliminate questionable payroll entries and allowances.

Additionally, MDAs have been told to stop initiating payments for promotion or salary arrears on the Integrated Personnel and Payroll Information System (IPPIS). Instead, such payments must be routed through the Committee on Payment of Promotions and Salary Arrears, following a directive issued on December 17, 2020, by the Ministry of Budget and Economic Planning.

“All MDAs will be required to submit monthly reconciliations of non-regular allowances received as part of personnel emoluments, indicating utilisation and any surplus funds,” the document said.

The Auditor-General of the Federation will be responsible for monitoring compliance as part of its audit duties. The guideline also prohibits MDAs from taking any step that could increase personnel costs, including new hiring, unauthorized allowances, or replacements, without prior approval. Violations may lead to sanctions against the heads of affected agencies.

The government is also enforcing a new recruitment policy aimed at ensuring a balanced academic to non-academic staff ratio and the mandatory inclusion of persons with disabilities in at least five per cent of new positions. Future applications for establishment or financial clearance must include compliance details.

On taxation, the guideline reiterates that MDAs lack the authority to grant tax exemptions to contractors.

“All exemptions must follow due process and be formally approved through the appropriate legal and fiscal channels,” it said.

MDAs known to routinely incur tax expenditures through exemptions or waivers are warned to stay within the tax expenditure cap specified in the 2025 budget.

Regarding development assistance, the government now requires all requests for support to pass through the International Cooperation Department of the Ministry of Budget and Economic Planning.

“Any support received in cash or kind must be documented and reported monthly to both the ICD and the Office of the Accountant-General of the Federation,” the guideline stated.

The new rules are part of broader efforts to strengthen accountability and align public spending with the government’s fiscal targets for the year.