Budget: Senate grills AGF over zero capital allocation to MDAs, unpaid contracts

…Raises concerns over centralized payment system

By Henry Umoru

ABUJA — The Accountant-General of the Federation (AGF), Dr. Shamsedeen Ogunjimi, faced intense questioning on Wednesday during a budget defence session before the Senate Committee on Finance.

The session became heated as senators raised concerns over zero capital allocations to many Ministries, Departments and Agencies (MDAs) in the 2025 budget, delays in the payment of executed contracts, and challenges associated with the centralized payment system.

Chairman of the Committee, Senator Sani Musa (APC, Niger East), in his opening remarks, expressed dissatisfaction with what he described as the attitude of the Office of the Accountant-General toward the committee.

“We are not going to consider your budget until we are satisfied that your office is ready to work in a way that delivers results for Nigerians,” Musa said.

He also questioned the continued use of the envelope budgeting system, arguing that it has not produced the desired outcomes and suggesting a shift toward a performance-based budgeting model.

Senator Danjuma Goje (APC, Gombe Central) said lawmakers were concerned about the level of budget implementation since 2024, noting that contractors frequently approach the National Assembly seeking intervention over unpaid contracts.

“The impression given to Nigerians following the removal of fuel subsidy and the harmonisation of the foreign exchange market was that government revenue would improve. Contractors are owed, and most MDAs have zero capital allocation in 2025. These are issues that require clarification,” Goje said.

Senator Muntari Dandutse (APC, Katsina South) also sought explanations regarding reports that revenue-generating agencies realised N28 trillion, while many contractors remain unpaid and capital allocations to several MDAs were reportedly reduced or eliminated.

He further expressed concerns about the operation of the centralized payment system, urging improvements to enhance efficiency and transparency.

Other senators, including Abdul Ningi (PDP, Bauchi Central), Asuquo Ekpenyong (APC, Cross River South), Adams Oshiomhole (APC, Edo North), Aminu Abbas (APC, Adamawa Central), and Patrick Ndubueze (APC, Imo North), emphasised the need for improved budget implementation and stronger financial oversight mechanisms.

Responding, Ogunjimi attributed some of the challenges to the award of contracts by MDAs without corresponding budgetary provisions or available funds. He noted that this situation led to directives prohibiting MDAs from awarding contracts without confirmed funding.

“As Accountant-General of the Federation, my office disburses funds to relevant agencies when resources are available. Disbursement can only occur when funds have been realised,” he said.

The AGF also noted that the previous reliance on “Ways and Means” financing is no longer being applied, citing broader fiscal and economic considerations.

He acknowledged that there have been operational challenges with the centralized payment system but assured the committee that steps are being taken to improve its efficiency.

The committee later went into a closed-door session with the AGF.

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