AGF urges lawmakers to restore direct project funding for MDAs

Lateef Fagbemi, the Attorney-General of the Federation and Minister of Justice, has advised the National Assembly to revisit Nigeria’s contract execution framework by allowing ministries, departments and agencies (MDAs) to once again receive and manage project funds directly.

Fagbemi, a Senior Advocate of Nigeria, told lawmakers that the earlier decentralised system under which MDAs handled procurement and payments worked better than the current centralised arrangement that places contract processing largely with the Office of the Accountant-General of the Federation.

He argued that the existing structure is weighed down by administrative hurdles and delays, noting that empowering MDAs to control their project funds would improve efficiency and limit undue influence in contract awards.

The AGF made the remarks while appearing before the Senate Committee on Judiciary, Human Rights and Legal Matters to defend the Ministry of Justice’s 2026 budget proposal.

“The old system is better. That is the best. You don’t need to know anybody before your allocations are released.

The current system is plagued with so many difficulties,I don’t want to say complexities,” Fagbemi said.

Nigeria’s contract execution debate has long revolved around two models: the former decentralised approach and the current centralised payment system coordinated through the Office of the Accountant-General.

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Under the previous arrangement, funds approved by the National Assembly were released straight to MDAs, which then conducted procurement and executed projects within their budgetary limits. Accounting officers in each MDA oversaw contract awards and payments, subject to checks by institutions such as the Bureau of Public Procurement, the Auditor-General and relevant legislative committees.

Supporters of that model say it enabled quicker decision-making, reduced payment bottlenecks and allowed agencies to plan and implement projects more effectively within the fiscal year.

Concerns over misuse of funds, weak internal controls and overlapping payment processes, however, prompted reforms aimed at tightening oversight of public finances.

These changes ushered in measures such as the Treasury Single Account and a more centralised payment system designed to strengthen cash management.

Advocates of the centralised approach maintain that it enhances transparency, curbs leakages and aligns payments with government liquidity by standardising procedures across MDAs.

Yet many agency heads complain that the system has slowed fund releases and delayed project delivery. According to them, difficulties in accessing approved funds have contributed to stalled projects, cost overruns and weaker budget performance.

Fagbemi also drew attention to Nigeria’s ageing legal framework, warning that several laws no longer reflect current realities.

He said increased funding for the justice sector would support the review and enactment of modern legislation.

“Many of our laws are outdated and no longer responsive to contemporary reality.

“Increased funding will support the review, drafting and enactment of progressive legislation that aligns with global best practices and addresses emerging challenges,” he said.

He stressed that adequate funding of the justice sector is essential to economic growth and investor confidence.

“A well-funded justice sector is not merely about the ministry, its parastatals or the judiciary; it is about national development through economic growth.

” Investors are more confident in economies where contracts are enforceable and disputes are resolved fairly and swiftly,” Fagbemi said.

He added that a strong justice system enhances accountability, reduces conflict and promotes national cohesion, pledging the ministry’s cooperation with lawmakers to ensure effective delivery of justice.

The AGF also criticised the envelope budgeting system, lamenting that approved allocations are often released late or not in full.

“The constraint we have is this enveloping system. If what is approved here is matched with adequate and timely releases, it would make a significant difference,” he said.