The government has established new guidelines to regulate foreign exchange payments in an effort to maintain financial discipline and revive the stalled International Monetary Fund (IMF) program.
The guidelines require all ministries and divisions to obtain approval from the Ministry of Finance’s External Finance Wing for any commitments involving foreign exchange payments, such as subscriptions and contributions to international organizations.
According to the Constitution, the financial procedure of the federal government is outlined in articles 78 to 84. This generally mandates that any expenditure from the Federal Consolidated Fund must be authorized by the National Assembly and specified in the Schedule of Authorized Expenditure, which the prime minister authenticates.
Additionally, the federal government can authorize additional expenditures (supplementary grants) from the Federal Consolidated Fund during a financial year, regardless of whether the Constitution charges the expenditure upon that fund.
The Public Finance Management Act 2019, enacted by the federal government by Article 79 of the Constitution, specifies that the custody and operation of the Federal Consolidated Fund and Public Account of the Federation shall be vested in the Finance Division under the supervision of the federal government. Furthermore, no authority may incur or commit any expenditure or enter into any liability involving expenditure from the Federal Consolidated Fund and Public Account of the Federation without sanction from a duly-empowered competent authority and the appropriate financial provisions.
The Finance Division, as mandated by the Rules of Business 1973, is responsible for managing the federal government’s finances and addressing financial matters affecting the country as a whole. Accordingly, over the past year, the Finance Division has repeatedly emphasized the need for efficient, prudent, and disciplined management of resources by all Principal Accounting Officers (PAOs) and other persons authorized to spend public money.
To maintain financial discipline, the Finance Division has reiterated that all expenditures should be based on well-defined plans and remain within the allocated and released budget.
The PAOs, other authorized officers, and accounting officers should not approve any expenditure without the availability of funds through the budgetary mechanism.
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