FG Moves to Sanction Government Officials Over Inflated Contracts

The Federal Government has warned heads of government agencies, corporations, commissions and other publicly funded institutions against awarding inflated contracts, threatening sanctions for officials who violate procurement regulations.

The government said it would no longer tolerate the practice of awarding contracts above approved price benchmarks, restricting competition through exclusive arrangements with contractors and ignoring established procurement procedures.

Politics Nigeria reports that the warning was contained in a circular issued by the Secretary to the Government of the Federation, George Akume.

He directed accounting officers across federal institutions to ensure that all procurement activities comply with the Public Procurement Act, 2007, as amended by the Finance Act, 2020.

The directive was addressed to ministers, permanent secretaries, heads of government agencies, parastatals and other senior public officials responsible for overseeing the expenditure of public funds.

Akume expressed concern that several government-owned enterprises and corporations had continued to award contracts without following the provisions of the procurement law.

He noted that the violations had persisted despite the legal framework introduced to regulate public procurement and promote accountability in government spending.

According to the SGF, some institutions had engaged in practices that allowed contractors to benefit from inflated contract prices while limiting opportunities for other qualified companies to compete for public projects.

The circular stated, “It has come to the attention of the Federal Government that despite the provisions of Section 15 of the Public Procurement Act, 2007, as amended by the Finance Act, 2020, several Federal Government Owned Enterprises and Corporations continue to procure and award contracts without recourse to the provisions of the Public Procurement Act, 2007.”

The government identified several consequences of the violations, including excessive contract costs, restricted competition and the failure of some institutions to obtain the necessary regulatory supervision before awarding projects.

“This practice has resulted in contract sums that are above established pricing benchmarks, captive markets for exclusive contractors, significant departure from approved guidelines and absence of critical regulatory oversight, amongst other lapses,” the circular added.

Akume described the situation as unacceptable, warning that the Federal Government would take action against institutions and accounting officers that continued to disregard the law.

“This non-compliance is unacceptable and will no longer be tolerated,” he said.

Consequently, the SGF directed all Federal Government-owned enterprises, corporations, councils, authorities and commissions that utilise public funds to conduct their procurement activities in accordance with the Public Procurement Act.

He explained that the directive was necessary to ensure transparency, accountability and value for money in the award and execution of government contracts.

The circular stated, “Therefore, to ensure that the core principles of transparency, accountability and value for money are achieved, all Federal Government Owned Enterprises, Corporations, Councils, Authorities and Commissions are accordingly directed to ensure that their procurements are implemented in line with the Public Procurement Act, 2007, provided they utilise public funds.”

The directive also places considerable responsibility on the heads of the affected institutions, who serve as accounting officers. They are expected to supervise procurement activities and ensure that their organisations do not award contracts outside the provisions of the law.

Akume specifically instructed the accounting officers to liaise with the Bureau of Public Procurement (BPP) for clarification and guidance on the implementation of the regulations.

The SGF warned that officials who ignored the directive and continued awarding contracts without following the required procedures would face sanctions.

“The Heads of Enterprises, Corporations, Councils, Authorities and Commissions, who are also the Accounting Officers, are hereby directed to liaise with the Bureau of Public Procurement for further guidance, as any Accounting Officer who contravenes this directive and continues to award contracts without recourse to the provisions of the Public Procurement Act, 2007, shall be sanctioned accordingly.”

He further directed that the circular should be circulated among all accounting officers for immediate implementation.

“The content of this Circular should be brought to the attention of all Accounting Officers for immediate and strict compliance,” he said.

Several prominent government offices and institutions were copied on the directive. They include the Chief of Staff to the President, Deputy Chief of Staff to the President, Principal Secretary to the President, Head of the Civil Service of the Federation and all ministers and ministers of state.

The National Security Adviser, Economic Adviser to the President, special advisers, senior special assistants, Chief of Defence Staff, service chiefs, Inspector-General of Police and Governor of the Central Bank of Nigeria were also listed among the recipients.

Other institutions included the Federal Civil Service Commission, Police Service Commission, Code of Conduct Bureau, Code of Conduct Tribunal, Federal Character Commission, Revenue Mobilisation, Allocation and Fiscal Commission, Federal Inland Revenue Service and Independent National Electoral Commission.

The chairmen of the National Population Commission, Independent Corrupt Practices and Other Related Offences Commission, Economic and Financial Crimes Commission and National Drug Law Enforcement Agency were also copied.

The circular further extended to permanent secretaries, heads of extra-ministerial departments, the Clerk of the National Assembly, Chief Registrar of the Supreme Court, Accountant-General of the Federation, Auditor-General for the Federation and heads of government-owned companies and parastatals.

What the Public Procurement Act Says

The Public Procurement Act, 2007, provides the legal framework for the award of government contracts and the management of procurement activities across federal institutions.

It also established the Bureau of Public Procurement as the regulatory body responsible for setting procurement standards, monitoring compliance and ensuring that public contracts are awarded through transparent and competitive processes.

Section 15 of the Act, as amended by the Finance Act, 2020, extends its application to federal government-owned enterprises, corporations, councils, authorities and commissions that utilise public funds.

This means that government-owned institutions cannot avoid procurement regulations simply because they operate outside conventional ministries and departments.

Section 20 of the Act also establishes responsibilities for accounting officers, including the supervision of procurement activities and ensuring compliance with the law.

Previous Government Measures Against Inflated Contracts

The warning comes amid several attempts by the Federal Government to strengthen procurement controls and reduce the cost of executing public projects.

In October 2025, the Federal Executive Council directed federal institutions to strictly comply with the Public Procurement Act following its meeting of August 13, 2025.

The decision was communicated through a circular issued by Akume. It covered government-owned companies and enterprises, the National Assembly, the Judiciary, defence and security agencies and the Central Bank of Nigeria, among other institutions that spend public funds.

The government has also introduced additional measures to prevent contractors and public institutions from using contract variations to increase project costs beyond approved amounts.

In December 2025, a Federal Government directive communicated through the SGF introduced a revised framework for reviewing contract variations and modifications to project scopes.

By May 2026, the Bureau of Public Procurement had moved to enforce the framework, directing Ministries, Departments and Agencies to obtain its certification before processing upward revisions of contract sums.

The new guidelines require requests for variation orders, fluctuation claims and changes to project scopes to pass through the BPP for review and certification before being forwarded to the appropriate approving authority.

The requirement applies regardless of the value of the contract variation.

The revised arrangement replaced the 2013 framework, which required presidential approval for variations exceeding 15 per cent of the original contract sum or N1bn.

The BPP said the changes were intended to close loopholes that had allowed contractors and government institutions to increase project costs through questionable contract adjustments.

The bureau also warned that variations processed without its certification could attract penalties under the Public Procurement Act. These include possible suspension of responsible officers and debarment of contractors.

BPP Director-General, Dr Adebowale Adedokun, said the government wanted to prevent contract adjustments from becoming a means of increasing public expenditure without proper justification.

“Variations must not become a backdoor for cost inflation and scope creep,” he said.

Adedokun explained that the guidelines would ensure that every adjustment to an approved government contract was necessary, properly justified and capable of delivering value for money.