By Emmanuel Onwubiko

In theory, Nigeria’s capital budget is the engine room of transformation. It is the segment of public expenditure meant to build the future: roads that connect markets, hospitals that save lives, schools that shape minds, power plants that energize industries, ports that facilitate trade, and digital infrastructure that integrates the economy into global networks. Capital spending is not consumption; it is investment. It is the bridge between today’s revenue and tomorrow’s prosperity.

Yet across the 2024–2025 fiscal period, Nigeria has been trapped in a troubling paradox: capital budgets were duly approved, publicly celebrated, and politically defended, but in execution, they were starved.

By the third quarter of 2025, only about 17.7 percent of the capital budget had reportedly been released, according to President Bola Ahmed Tinubu in his presentation to the National Assembly. Even more striking, analysis of releases to Ministries, Departments, and Agencies (MDAs) showed that out of an expected ₦10.81 trillion in capital allocations, only ₦834.8 billion had been released by mid-2025 , less than 8 percent performance.

In practical terms, Nigeria budgeted for transformation but financed stagnation.

Several ministries publicly admitted to receiving zero capital releases across 2024 and 2025. The Federal Ministry of Health reportedly received ₦36 million out of a ₦218 billion capital allocation, 0.016 percent. The Ministry of Women Affairs and Social Development received ₦394.8 million from an ₦89.8 billion allocation, about 0.44 percent. These are not marginal shortfalls; they are near-total fiscal droughts.

Even as capital budgets were extended into 2026 to accommodate unfinished projects, the chronic under-release reveals something deeper than administrative delay. It points to structural fiscal stress and misplaced priorities embedded in Nigeria’s public finance architecture.

At the heart of the crisis lies a severe recurrent–capital imbalance. Federal revenues are overwhelmingly absorbed by debt servicing, salaries and pensions, and statutory transfers. Debt servicing alone consumes an alarming share of total revenue, crowding out developmental spending. When revenue inflows are weak and debt obligations are rigid, capital projects become the first casualty. Appropriation without cash backing becomes ritualistic, a legislative performance detached from fiscal reality.

Compounding this imbalance are extended budget cycles and overlapping fiscal years. Nigeria has increasingly carried capital budgets across multiple years, signaling execution inefficiencies and poor cash-flow planning. What should be a disciplined annual fiscal cycle has evolved into a rolling backlog of unfinished commitments. Projects announced with fanfare quietly drift into administrative limbo.

The bottom-up cash planning mechanism operated through the Office of the Accountant-General further tightens liquidity for MDAs. In principle, cash planning enhances fiscal prudence. In practice, however, it has prioritized prior-year carryovers and available cash balances over strategic investment needs. Ministries with urgent infrastructure demands are forced into a queue, dependent not on approved budgets but on treasury liquidity.

The consequences are severe.

Number one, infrastructure projects stall. Roads remain uncompleted, transmission lines unfinished, water systems abandoned mid-construction. Contractors demobilize. Costs escalate due to inflation and exchange rate volatility. Investor confidence weakens when public commitments prove unreliable.

Number two, social services deteriorate. When health capital budgets are barely released, hospitals cannot upgrade equipment, expand capacity, or modernize facilities. When social development funds are withheld, vulnerable populations bear the brunt. The result is declining human capital outcomes, rising medical tourism, and widening inequality. Development ceases to be a lived experience and becomes a policy slogan.
Number three, Nigeria accumulates debt without proportionate asset creation. Borrowing to finance recurrent expenses creates no productive base for repayment. Instead, the country enters a vicious fiscal loop: borrow to fund deficits, allocate revenue to debt servicing, crowd out capital, borrow again. As debt stock rises without matching infrastructure expansion, fiscal sustainability weakens and credit risk perceptions intensify.

Number four, the crowd-out effect becomes systemic. Recurrent commitments are rigid; capital investment is discretionary. Each revenue shortfall reinforces the dominance of salaries and interest payments. The fiscal structure thus entrenches consumption over transformation, short-term survival over long-term growth.

Against this backdrop, the Presidency’s capital allocation, ₦355.1 billion in the 2026 appropriation, stands as a significant political line item, though execution transparency remains limited. Service-wide votes and executive-level contingencies often absorb large shares before sectoral ministries receive direct funding. Projects inserted under executive budget lines can dilute sectoral planning coherence. Without rigorous public reporting on execution outcomes, large appropriations risk existing more on paper than in concrete and steel.

The analytical implications for Nigeria are sobering.

Fiscal sustainability is increasingly precarious when borrowing fills revenue gaps without expanding productive capacity. Development indicators, from life expectancy to educational attainment, stagnate when capital investment falters. Investor confidence wanes amid chronic under-execution and cash-flow uncertainty. Perhaps most damaging, budget credibility erodes. When approved budgets diverge markedly from actual releases, democratic oversight weakens and public trust declines.

The paradox is not merely technical; it is structural and generational. A nation that consistently underfunds its capital base mortgages its future.

Roads not built today mean higher logistics costs tomorrow. Hospitals not upgraded today mean weaker human capital tomorrow. Schools not rehabilitated today mean lower productivity tomorrow.

Nigeria stands at a fiscal crossroads. Continuing on the present trajectory risks entrenching a debt-heavy, low-investment equilibrium characterized by slow growth and fragile development outcomes.

Reversing course requires deliberate reform: strengthening domestic revenue mobilization, reprioritizing expenditure toward capital formation, enforcing stricter budget credibility standards, enhancing transparency in service-wide votes, and institutionalizing disciplined project execution frameworks.

Capital budgets must cease to be ceremonial artifacts. They must become credible instruments of transformation.

Until approved money consistently translates into completed projects, Nigeria’s capital budgets will remain what they have too often been in recent years: promises printed in trillions, but starved in reality.