Capital spending by Federal Authorities ministries, departments, and businesses has remained severely constrained during the last three fiscal years, whilst retained revenues expanded and debt service absorbed an awesome share of accessible sources, in keeping with findings by The PUNCH.
An evaluation of knowledge from the Finances Workplace of the Federation’s Medium-Time period Expenditure Framework and Fiscal Technique Paper experiences overlaying 2023, 2024, and the January–July interval of 2025 confirmed that MDAs’ capital expenditure votes have been persistently underfunded, leaving a cumulative hole of N15.21tn over the three-year interval.
Regardless of successive will increase in headline capital budgets, precise releases and spending didn’t maintain tempo, reflecting deep structural strain on public funds, largely pushed by rising debt service obligations.
Over the three years, capital expenditure below the class “Capital Expenditure (MDAs + Others)” totalled N27.33tn when measured on a comparable foundation that features the 2025 professional rata. Precise capital expenditure traceable to these votes amounted to N12.13tn, leaving a shortfall of N15.21tn.
In share phrases, MDAs accessed simply 44.37 per cent of the capital funding offered for them over the interval, which means that greater than half of the deliberate capital tasks have been left unfunded or solely partially funded.
The underperformance was evident in every particular person 12 months. In 2023, the Federal Authorities budgeted N5.31tn for capital expenditure below MDAs and others. Precise capital expenditure stood at N3.25tn by year-end, implying a shortfall of N2.06tn and a efficiency ratio of about 61.15 per cent.
Though this represented the strongest 12 months inside the three-year window in relative phrases, it nonetheless meant that just about two-fifths of deliberate capital spending was not delivered.
The hole widened sharply in 2024. Capital expenditure below MDAs and others was budgeted at N11.21tn, greater than double the 2023 provision, reflecting formidable infrastructure and service-delivery plans.
Nonetheless, precise capital expenditure for the 12 months got here to N5.81tn, leaving a deficit of N5.40tn and a efficiency of roughly 51.85 per cent. In absolute phrases, the shortfall in 2024 alone exceeded the complete capital finances for MDAs in 2023.
By 2025, the squeeze turned extra pronounced. The complete-year finances for MDAs’ capital expenditure stood at N18.53tn. When adjusted to a January–July professional rata expectation of N10.81tn, precise capital expenditure for MDAs and others within the first seven months was simply N834.80bn. This translated to a professional rata shortfall of N9.98tn and a efficiency of about 7.72 per cent inside the interval reviewed.
Within the MTEF doc for 2026 – 2028, it was famous that “Capital expenditure implementation was notably weak. Solely N834.80bn had been launched to Ministries, Departments, and Businesses out of the pro-rata capital finances of N10.81tn, indicating lower than 10 per cent efficiency on the evaluation interval.
“The low capital expenditure is especially because of the effort to satisfy the 2024 capital finances, which was prolonged to December 2025. General, the full capital expenditure reached N3.60 trillion as of July 2025, representing a shortfall of 73.7 per cent of the goal for the primary seven months.”
The three-year precise determine of N12.13tn features a N2.23tn capital improvement fund recorded in 2025 for tasks accepted within the 2024 finances however financed within the subsequent 12 months. Whereas this rollover funding offered some reduction for stalled tasks, it did little to change the general image of persistent underfunding.
Even after accounting for this adjustment, the funding hole remained substantial, displaying the dimensions of delayed or deserted capital tasks throughout MDAs. The capital squeeze stands in stark distinction to the trajectory of Federal Authorities retained revenues and debt service obligations over the identical interval.
In 2023, the Federal Authorities’s retained income, excluding government-owned enterprises, stood at N10.29tn, exceeding the finances projection of N8.63tn. Nonetheless, debt service for the 12 months amounted to N8.56tn, which means that about 83.15 per cent of retained income was spent on servicing debt alone.
In sensible phrases, for each N100 earned by the Federal Authorities in retained income in 2023, about N83 went to debt service. This left restricted fiscal room for different obligations, together with capital expenditure. Certainly, MDAs’ capital expenditure in 2023 amounted to N3.25tn, representing about 31.54 per cent of retained income for the 12 months.
Whereas this ratio seems sizeable, it nonetheless signifies that debt service absorbed greater than twice the share of income dedicated to MDAs’ capital tasks. The strain intensified in 2024, regardless of a major growth in retained income. The Federal Authorities’s retained income for the 12 months stood at N19.88tn, in contrast with a finances estimate of N23.02tn.
Debt service, nonetheless, rose sharply to N12.63tn, far above the budgeted N8.27tn. In consequence, about 63.54 per cent of retained income in 2024 was spent on debt service. On the similar time, MDAs’ capital expenditure in 2024 stood at N5.81tn, equal to about 29.25 per cent of retained income.
This marked an additional decline within the share of income dedicated to capital tasks in contrast with 2023, whilst capital wants expanded and infrastructure gaps widened.
The January–July 2025 figures counsel that the imbalance between debt service and improvement spending stays acute. Federal Authorities retained income within the first seven months of the 12 months stood at N12.36tn, in opposition to a professional rata expectation of N22.18tn.
Debt service throughout the identical interval amounted to N9.81tn, exceeding the professional rata debt service benchmark of N8.35tn. This meant that about 79.39 per cent of retained income between January and July 2025 was spent on debt service.
In distinction, MDAs’ capital expenditure of N834.80bn represented simply 24.80 per cent of retained income within the interval. In impact, debt service consumed greater than thrice the quantity spent on MDAs’ capital tasks inside seven months.
The dominance of debt service can also be evident when put next with mixture capital expenditure. Between January and July 2025, whole capital expenditure throughout all classes stood at N3.60tn, whereas debt service alone amounted to N9.81tn.
This suggests that the Federal Authorities spent roughly N2.7 on debt service for each N1 spent on capital tasks in the course of the interval. The composition of debt service through the years additional illustrates the strain on public funds.
In 2023, whole debt service of N8.56tn exceeded the finances provision by almost N2.00tn, pushed largely by greater home debt service and curiosity on methods and means advances. In 2024, international debt service rose sharply, contributing to the overshoot of greater than N4.36tn above the budgeted debt service determine.
These traits have direct implications for MDAs’ skill to implement capital tasks. With debt service taking precedence in money administration, capital releases are sometimes delayed, rationed, or rolled over to subsequent years.
The existence of the capital improvement fund for 2024 tasks financed in 2025 is itself a sign of how capital execution timelines have been stretched. Past MDAs, capital expenditure by government-owned enterprises additionally confirmed blended efficiency.
In 2023, GOEs’ capital expenditure stood at N573.13bn in opposition to a finances of N835.39bn. In 2024, precise GOEs’ capital expenditure fell to N354.99bn in contrast with a finances of N820.91bn.
Nonetheless, within the first seven months of 2025, GOEs’ capital expenditure matched its professional rata expectation at N478.86bn, suggesting that funding constraints have been extra extreme for MDAs than for GOEs in the course of the interval.
The broader capital expenditure envelope, which incorporates grants, donor funding, and multilateral or bilateral project-tied loans, additionally confronted vital shortfalls in 2025.
Whereas the professional rata plan for mixture capital expenditure in January–July 2025 stood at N13.67tn, precise spending was simply N3.60tn, leaving a spot of N10.07tn inside seven months.
For MDAs, the cumulative impact of those shortfalls is seen in delayed highway tasks, unfinished faculties and hospitals, stalled water schemes, and sluggish progress on safety and digital infrastructure.
The repeated hole between budgeted and precise capital spending additionally raises questions concerning the realism of annual capital plans and the effectiveness of finances execution frameworks.
The information present that whereas the Federal Authorities’s retained income has grown considerably since 2023, the advantages of that progress have been largely absorbed by debt service and non-debt recurrent expenditures.
With MDAs being underfunded, contractors dealing with federal highway tasks had, in the previous few days, staged protests on the Ministry of Finance, alleging extended non-payment for accomplished and ongoing works.
The contractors below the aegis of the All Indigenous Contractors Affiliation of Nigeria staged a protest on the Federal Ministry of Finance over alleged unpaid funds for tasks executed in 2024.
The affiliation claimed the Federal Authorities owes contractors about N4tn, however is particularly demanding the discharge of N760bn, which it stated the Minister of Finance, Wale Edun, had earlier pledged to pay in September.
The protesting contractors positioned a symbolic coffin on the entrance of the ministry, saying it represented the hardship and deaths some members had suffered because of the extended non-payment.
The Federal Authorities has promised to calm rising tensions amongst highway contractors, assuring that every one excellent funds will likely be cleared this December, following days of protests by contractors over mounting money owed and stalled mission financing.
The Minister of Works, David Umahi, who gave the peace of mind in the course of the reopening of the repaired Keffi Flyover in Nasarawa State, stated President Bola Tinubu had acknowledged the debt backlog and accepted the structure of a particular committee to confirm and settle all excellent claims.
The PUNCH earlier in August 2025 reported that the Federal Authorities might lengthen the 2025 finances into 2026, as sluggish capital mission implementation, procurement delays, and a shutdown of the cash-planning portal left many tasks stalled about eight months into the fiscal 12 months.
The opportunity of a rollover got here to mild at a stakeholders’ engagement in Abuja, organised by the Workplace of the Accountant-Normal of the Federation, to evaluation progress and challenges in implementing the prolonged 2024 capital finances and the 2025 capital finances below the Backside-Up Money Planning Coverage.
By December, President Bola Tinubu requested the Nationwide Meeting to approve the extension of the implementation of the 2025 Appropriation Act to March 31, 2026, as a part of efforts to finish the apply of working a number of budgets concurrently.
The President stated the proposed amendments would enable for the total launch of a minimum of 30 per cent of capital allocations to Ministries, Departments, and Businesses, noting that delayed releases had continued to undermine finances efficiency.
The PUNCH earlier completely reported that the Federal Authorities ordered ministries, departments, and businesses to hold over 70 per cent of their 2025 capital finances into the 2026 fiscal 12 months because the administration strikes to prioritise the completion of current tasks and comprise spending pressures within the face of weak revenues.
This directive is contained within the 2026 Abridged Finances Name Round issued by the Federal Ministry of Finances and Financial Planning and circulated to all ministers, service chiefs, heads of businesses and high authorities officers in Abuja.
In keeping with the round, “MDAs are to add 70 per cent of their 2025 FGN Finances to proceed in FY2026. All such rollover and uploads MUST be according to the fast wants of the nation in addition to authorities’s improvement priorities that aligns with the coverage course of the brand new administration which hinges on Nationwide Safety, the Financial system, Training, Well being, Agriculture, Infrastructure, Energy & Vitality in addition to social security nets, girls & youth empowerment.”
Growth economist and Chief Government Officer of CSA Advisory, Dr Aliyu Ilias, lamented that federal capital spending had grow to be unstable once more after a number of years of progress.
He stated the January–December cycle “went completely” for a number of years and helped align authorities tasks with private-sector planning. “Now I don’t know the way they will handle it,” he stated. “Most capital tasks are additionally going to endure. The normalcy we had achieved within the cycle is already damaged.”
Ilias warned that delays of this scale disrupt mission execution throughout the financial system, particularly in states that mannequin their fiscal calendars round federal spending.
He added that uncertainty in finances timelines reduces credibility and makes it tougher for the federal government to coordinate reforms with expenditure priorities.
