The Federal Government of Nigeria has issued a stringent directive to all Ministries, Departments, and Agencies (MDAs), threatening severe sanctions—including indefinite suspension of fund releases—for failure to prepare and submit their separate annual financial statements by December 31, 2025. The warning, aimed at enforcing fiscal discipline as the 2025 financial year concludes, was outlined in a circular dated December 22, 2025, signed by the Accountant-General of the Federation (AGF), Dr. Shamseldeen Ogunjimi.
Titled "Guidelines for Financial Activities for the End of the Year 2025", the circular mandates that non-compliant MDAs will face immediate suspension of funding, while directors or heads of accounts and administration will receive official queries. “Any MDA that fails to prepare and render its separate (stand-alone) annual financial statements will have its release of funds suspended indefinitely, while a query shall be issued to the director/head of accounts and administration,” Ogunjimi stated.
The directive further requires MDAs to ensure full collection and proper accounting of all revenues owed to the Federation Account and the Consolidated Revenue Fund/Treasury Single Account (TSA) Sub-Recurrent Account before year-end. MDAs authorized to retain 50% of their gross Internally Generated Revenue (IGR) must remit the remaining 50% to the TSA Sub-Recurrent Account, strictly adhering to the finance circular dated December 28, 2023 (reference: FMF/CME/OTHERS/IGR/CFR/21/2023).
Ogunjimi emphasized due diligence in revenue collection, utilization, and remittance, with mandatory uploads of IGR reports to the Government Integrated Financial Management Information System (GIFMIS) platform for accurate records. For entities under the Fiscal Responsibility Act 2007 (as revised in 2023), budgetary expenditure is capped at 50% of gross revenue, with 80% of the remaining balance remitted as interim or advance operating surplus to the TSA Sub-Recurrent Account.
This push for compliance reflects ongoing concerns over uneven adherence to financial regulations. Disclosures from the Fiscal Responsibility Commission indicate that while over ₦5 trillion in operating surpluses were remitted by MDAs between 2007 and 2024, more than ₦1.5 trillion was lost due to some agencies' failure to remit the required 80%.
Separately, Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has reiterated warnings that non-compliance with the revised Bottom-Up Cash Planning Policy could result in blocking capital fund releases for errant MDAs, underscoring the need for disciplined public financial management.
In July 2025, the Office of the Accountant-General introduced enhanced controls in response to a "surge in unretired advances and idle cash balances" across MDAs. Agencies were required to submit detailed reports on unretired advances, with threats of withdrawing imprest privileges or imposing further sanctions for violations.
The latest measures signal the Tinubu administration's intensified efforts to promote transparency, curb revenue leakages, and ensure efficient resource utilization amid economic challenges. With the Treasury Single Account framework in place, unspent funds are traditionally returned at year-end, but historical non-compliance has prompted stronger enforcement.
As the deadline approaches, MDAs face heightened scrutiny, with access to 2026 funds contingent on full adherence to reporting, remittance, and expenditure protocols. This directive aligns with broader reforms, including recent bans on physical cash collections and mandates for electronic revenue systems.
