The Ministry of Finance has officially notified the continuation of strict public expenditure controls and austerity protocols throughout fiscal year 2026-27. Issued on July 21, 2026, the formal notification follows decisions made by the Federal Cabinet during deliberations on the Annual Budget Statement for the upcoming fiscal period.
This measure extends spending restrictions that were previously approved by the cabinet in February 2023 as well as August and September 2024, ensuring ongoing enforcement of government cost-cutting directives.
Key Expenditure Restrictions
Under the extended directive, federal entities are subject to specific prohibitions aimed at curbing non-essential spending. Key restrictions include:
- A complete ban on purchasing new vehicles
- Prohibitions against acquiring non-essential machinery and equipment
- A halt on creating new posts
- A ban on conducting non-essential foreign travel using government funds
Institutions and Entities Covered
The spending limits apply across all federal administrative bodies, including ministries, divisions, attached departments, statutory bodies, autonomous organizations, and regulatory authorities.
In addition, the directives apply to State-Owned Enterprises (SOEs), where they function as legally binding instructions pursuant to Section 35 of the State-Owned Enterprises (Governance and Operations) Act, 2023.
Administrative Enforcement and Exemptions
Principal Accounting Officers and administrative leaders across public sector institutions are tasked with circulating the notification to all subordinate formations and enforcing rigid adherence to spending caps.
While the restrictions remain comprehensive, the policy allows for limited exceptions. Exemptions can only be considered on a case-by-case basis by the Finance Division's Austerity Committee, provided that entities submit formal requests accompanied by sufficient operational justification.