FG warns against inflation of public contracts and procurement violations

Wednesday, November 4, 2026 - The Federal Government has vowed to crack down on inflated public contracts and procurement violations, warning heads of government-owned agencies, corporations, councils, authorities and commissions that they risk sanctions for breaching procurement regulations.

The government raised the alarm over contract awards that exceed approved price benchmarks, restricted competition through exclusive arrangements for contractors and undermine regulatory oversight.

The Secretary to the Government of the Federation, George Akume, issued the warning in a circular directing accounting officers of Federal Government-owned enterprises and other public institutions to comply strictly with the Public Procurement Act, 2007, or face penalties.

The circular, obtained by our correspondent in Abuja, was addressed to ministers, permanent secretaries, heads of government agencies and parastatals, among other senior public officials.

Akume expressed concern that several government-owned enterprises and corporations continued to award contracts in violation of the procurement law, despite its amendment by the Finance Act, 2020.

He said the practice had resulted in inflated contract sums, restricted competition and inadequate regulatory oversight, warning that the government would no longer tolerate such breaches.

The SGF consequently directed all government-owned enterprises, corporations, councils, authorities and commissions that utilise public funds to ensure that their procurement activities comply with the Act.

He also instructed heads of the affected institutions, who serve as accounting officers, to liaise with the Bureau of Public Procurement for guidance, stressing that those who continued to award contracts in violation of the law would be sanctioned.

The directive places responsibility for procurement compliance on accounting officers and requires immediate circulation of the circular among them for strict implementation.

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.”

According to the SGF, the practice had contributed to inflated contract prices, restricted competition and inadequate regulatory oversight in public procurement.

“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 declared that the government would no longer tolerate such violations, warning that institutions that continued to disregard procurement regulations would face consequences.

“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 ensure that their procurement activities comply with the Public Procurement Act.

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 places particular responsibility on the heads of the affected institutions, who also serve as accounting officers, warning that they would be held accountable for continuing to award contracts outside the provisions of the law.

Akume specifically instructed the accounting officers to engage the Bureau of Public Procurement for guidance on the implementation of the procurement regulations.

The circular stated, “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.”

The SGF further directed that the circular 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.

Among the officials and institutions copied on the circular were the Chief of Staff to the President, Deputy Chief of Staff to the President, Principal Secretary to the President, Secretary to the Government of the Federation, Head of the Civil Service of the Federation and all ministers and ministers of state.

Others included the National Security Adviser, Economic Adviser to the President, special advisers and senior special assistants, Chief of Defence Staff, service chiefs, Inspector-General of Police and Governor of the Central Bank of Nigeria.

The directive was also addressed to the chairmen of 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.

Also copied were 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.

The circular further listed all permanent secretaries and 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 directors-general and chief executives of parastatals, agencies and government-owned companies among its recipients.

The Public Procurement Act, 2007, established the Bureau of Public Procurement as the regulatory authority responsible for monitoring and overseeing public procurement activities, setting standards and ensuring that public procurement is conducted transparently and competitively.

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

The amendment reinforced the requirement for institutions outside conventional ministries and departments to comply with procurement regulations when spending public funds.

Section 20 of the Public Procurement Act also places responsibility for procurement compliance on accounting officers, including permanent secretaries and heads of government agencies and corporations.

The provision makes accounting officers responsible for supervising procurement processes and ensuring that their institutions comply with the Act.

The latest warning comes amid growing concerns over procurement irregularities and the management of public funds across federal institutions.

In October 2025, the Federal Executive Council directed the strict application of the Public Procurement Act across federal institutions following its meeting of August 13, 2025.

The decision was conveyed in a circular issued by Akume, directing government institutions, including government-owned companies and enterprises, the National Assembly, the Judiciary, national defence and security agencies and the Central Bank of Nigeria, to comply with procurement requirements when utilising public funds.

In another measure to strengthen accountability, the Federal Government in October 2026 directed the implementation of a mandatory 14-calendar-day standstill period between the announcement of an intended contract award and the conclusion of procurement contracts.

The measure was designed to give unsuccessful bidders an opportunity to seek clarification, request debriefing or lodge complaints before contracts are finalised.

The government has also introduced tougher measures against contractors involved in fraud, corruption, falsification of documents and persistent failure to execute public contracts.

Under the National Guideline on Debarment of Contractors, Consultants and Service Providers, contractors found culpable may be barred from participating in federal procurement for between three and five years.

The latest directive reinforces the government’s position that public procurement must be conducted within the established legal framework, with accounting officers bearing responsibility for ensuring that public funds are spent transparently and in accordance with approved procedures.

The latest directive comes amid a series of measures by the Federal Government to curb inflated contract costs, tighten procurement controls and prevent variations in contract sums from being used to inflate public spending.

In May 2026, The PUNCH reported that the BPP barred Ministries, Departments and Agencies from processing upward revisions of contract sums without first obtaining certification from the bureau.

It also introduced guidelines centralising the review and approval process for contract variations and modifications to project scopes, irrespective of the value involved.

The bureau, in a statement signed by its Head of Press and Public Relations, Zira Nagga, said the reforms were designed to block what it described as one of the persistent channels through which contract costs were inflated and corruption perpetrated in Nigeria’s public procurement system.

The guidelines, issued pursuant to Sections 5(a) and (o) of the Public Procurement Act, 2007, implemented a Federal Executive Council-approved policy communicated through a circular from the Secretary to the Government of the Federation in December 2025.

They replaced the 2013 framework, which required presidential approval only for contract variations exceeding 15 per cent of the initial contract sum or N1bn.

Under the revised framework, all requests for variation orders, fluctuation claims and modifications to project scopes must be submitted to the BPP for review and certification before being forwarded to the relevant approving authority, regardless of the amount involved.

The bureau warned that contract variations processed without its certification would attract sanctions under the Public Procurement Act, including the suspension of responsible officers and possible debarment of contractors.

The Director-General of the BPP, Dr Adebowale Adedokun, said the guidelines were intended to prevent contractors and public institutions from exploiting contract variations to increase project costs beyond approved amounts.

“Variations must not become a backdoor for cost inflation and scope creep,” he said, adding that the measures would ensure that every adjustment to a public contract was necessary, justified and delivered value for money.

Adedokun also said the bureau would enforce the guidelines fairly across all MDAs.

In a separate disclosure in August 2026, the BPP boss said the Federal Government had saved about N1.4tn in 18 months through the bureau’s price intelligence and benchmarking initiatives, which were introduced to check inflated contract estimates.

He made the disclosure during a media interview on the sidelines of a public procurement capacity-building workshop for senior management and executive staff of the Nigeria Deposit Insurance Corporation in Lagos.

According to him, the introduction of price intelligence had enabled the bureau to scrutinise project costs submitted by government institutions and compare them with established pricing standards before granting procurement approvals.

He said the reforms had also forced contractors to moderate their bids after realising that the bureau would reject quotations considered excessive.

Adedokun said, “At the advent of the procurement reforms that we embarked on about two years ago, one of the things that we introduced was price intelligence and benchmarking. That had not been there before.

“What that department does is to ensure that the cost of projects is verified and checked against fair pricing standards all over the world. We have professionals trained in how to cost projects.

“So, if a government agency prices a project and it comes to the BPP, we benchmark it. Through benchmarking, we can arrive at what we consider a fair price for that project.”

He added that contractors had increasingly sought guidance on acceptable price ranges rather than risk having their bids rejected for exceeding the bureau’s benchmarks.

The BPP had also disclosed that its procurement reviews saved the Federal Government more than N303bn, $304.9m and €1.74m from inflated contract costs between January and September 2025.

The figures highlight the potential financial impact of procurement reviews and price controls, although the bureau’s reported savings are based on its own assessment of the contracts reviewed.

The latest warning by Akume therefore reinforces the government’s efforts to make procurement compliance mandatory across publicly funded institutions, with particular emphasis on the responsibility of accounting officers and the role of the BPP in preventing contract inflation.