2025 Budget: Capital Without Cash

Nigeria’s economic growth may be under a serious threat as several ministries received zero or near-zero capital budget releases in 2025 despite huge appropriations approved by the National Assembly, experts have warned.

Economists and public finance experts who spoke to Daily Trust viewed the situation as a budget execution crisis which, according to them, is capable of crippling infrastructure delivery, weakening public service provision and slowing economic growth at a time the country is grappling with fiscal strain, rising debt-servicing costs and inflationary pressures.

Checks by Daily Trust revealed that the crisis cuts across key ministries, including health, interior, security, transportation, marine and blue economy, housing and women affairs, where capital allocations were largely not cash-backed throughout the 2025 fiscal year.

The National Assembly had approved N57.1 trillion as the total 2025 budget, comprising N43.5 trillion capital allocations and N13 trillion recurrent expenditure.

The 2025 budget has several new projects, including 20,000 houses under the Renewed Hope Housing Agenda and massive ICT projects. In addition, there were 3,573 projects worth N653.19bn to be directly delivered in federal constituencies, while 1,972 projects valued at N444.04bn were to be delivered directly in senatorial districts.

It was revealed at the recent budget defence sessions at the National Assembly that the poor or non-release of capital allocations to the Ministries, Departments and Agencies (MDAs) has hampered their capacity to execute programmes and projects.

The Accountant-General of the Federation, Shamseldeen Ogunjimi, who appeared before the Senate Committee on Finance on February 12, attributed the crisis to “indiscriminate” contract awards by MDAs without confirmed funding.

“Yes, as the Accountant-General of the Federation, my office is expected to disburse funds to relevant agencies at the appropriate time, but that can only be done if the funds are available because I must have the funds before I can disburse them.

“I also want to remind us that ‘Ways and Means’ used in the past for such funding is no more, for the good of the nation’s economy,” he explained.

Health, interior, transportation, housing ministries, others starved of funds

The Ministry of Health and Social Welfare reportedly received only a negligible fraction of its approved capital allocation in the 2025 fiscal year. The ministry received only N36 million of the appropriated N218 billion for capital projects, representing 0.0165 percent.

The Minister of Interior, Olubunmi Tunji-Ojo, recently told a budget session of the National Assembly that his ministry got zero capital budget releases for two consecutive fiscal years, 2024 and 2025. This is said to have left agencies under the ministry, including the Nigeria Immigration Service and the Nigerian Correctional Service, struggling to upgrade facilities, modernise operations or expand infrastructure.

The Ministry of Transportation was said to have experienced extremely low capital releases relative to approved allocations. Of its N256.73 billion capital allocation in the 2025 budget, only N2.57 billion was released, representing about one percent.

The Ministry of Women Affairs and Social Development, which has programmes such as women empowerment, gender-based violence response shelters and child protection facilities under its purview, received only N394.8 million of the N89.8bn approved for capital expenditure in 2025.

The Ministry of Housing also got zero funding for its capital projects in the 2025 budget, though an official in the ministry told Daily Trust: “But late December, they released AIE (Authority to Incur) to the tune of around N23 billion as part of 30 percent of the 2025 budget. The procurement process is on at the moment for the 30% AIE.”

The Ministry of Marine and Blue Economy, mandated to harness opportunities in shipping, fisheries, coastal tourism and port infrastructure, received N202 million out of its N3.53 billion capital allocation for 2025, representing 1.7 percent.

While annual budgets often contain ambitious capital expenditure components, implementation performance has historically lagged behind projections.

Analysts and stakeholders say Nigeria has never had it this bad in recent times following the non-release of capital allocations for the 2025 budget, while the 2026 budget is currently in operation.

Late in 2025, the federal government urged all MDAs to roll over 70 percent of their 2025 capital budget to 2026 in line with the immediate needs of the country, as well as government development priorities that align with the policy direction of the new administration.

President Bola Ahmed Tinubu had, prior to the presentation of the 2026 budget, asked the National Assembly to consider and pass a new N43.56 trillion Appropriation (Repeal and Re-enactment) Bill for the 2024–2025 fiscal years, in a move to end multiple budgets, while critical projects in the harmonised budgets would be implemented until March 2026.

In a letter transmitted to both chambers of the legislature, the president explained that the proposed legislation would reset the federal budgeting framework by harmonising appropriations for the two fiscal years and consolidating emergency expenditures undertaken in the national interest.

Economic growth will suffer – Experts

Speaking to Daily Trust, a professor of Economics, Ndubisi Nwokoma, said appropriating money for projects without cash backing is tantamount to mere “paperwork.”

He said this means Nigeria cannot achieve any economic growth, as financing capital projects is as good as financing development.

Nwokoma said: “There’s no value in the economy. It becomes an annual ritual. You go for budget defence, get approval for certain amounts. But the money is not available. When the money comes out, some of it will be frittered away, you know, filtered away or so. And it’s a big problem for development.

“There’s no way you can develop if you don’t spend. Because there is a programme by the UN and the global community about financing development. And there was a conference that took place in Mexico which was about how to finance development, and it was agreed that unless finance is available, development cannot happen.

“So, finance is very critical for the enhancement of development across every economy. And the way to support the third world is to make sure that finance is available. You can raise money from the global north and from the south too, from China and other strong southern economies.

“There’s a lot of disconnect. One, there’s no money to finance development. Secondly, the narrative we had was that government public finance would be much better when you remove subsidies and harmonise the foreign exchange market.

“And the story has not changed. Even at that, the level of borrowing has increased. That’s the difference between Tinubu’s government and Buhari’s.

“There’s a high cost of governance. There are a lot of things that money should not be spent on but money is spent on them. Meanwhile, there is nothing for critical development projects. There’s no money available. So there is a problem with the budgeting process, availability of money, and then there is corruption. There are a lot of lacunae along the path. There is a big problem in the government’s public financial management.”

Lawal Wasiu Omotayo, an economist with Al-Hikmah University, said: “When parastatals are not adequately funded, there are long-run economic implications. It is an indication that the regulatory bodies responsible for monitoring how they discharge their duties, and whether they are implementing the vision of the sitting president, are not functioning effectively.”

He noted that government presence is not abstract but expressed through MDAs that execute policies and deliver services to citizens. According to him, when these institutions are deprived of their statutory allocations, the impact is immediately felt by the common man.

“You cannot use 2024 to fund 2025. Once the budget has been passed and signed into law, there is no reason why ministries captured in that budget should not receive their allocations. If as of 2025 some ministries have not received their funds, then that points to a failure within the regulatory and oversight framework,” he stated.

“The institutions responsible for ensuring that ministries are funded must be on their toes. If allocations are not released, a memo should be written immediately. There should be swift action. Otherwise, it becomes an indication of institutional failure,” he maintained.

On the way forward, he advocated direct and transparent allocation channels, reduced bureaucratic layers, strengthened institutional accountability as well as closer coordination between ministries and budget authorities.

For a professor of Finance at the University of Ilorin, Muftau Ijaiya, “the cost of governance should be reduced. The amount spent on the National Assembly is too much. More money will come back to the masses if they reduce the cost of governance. It will reduce budget rollover.”

Senior Partner at SPM Professionals, Dr. Paul Alaje, noted that no significant development will occur if Nigeria continues the current trend of budget rollovers.

“If we claim that we have generated so much revenue, such that we have even surpassed our budgetary expectation on one hand, and we also borrowed as much as we did in 2025, one can only ask what happened to just 30% of the budget which was earmarked for capital expenditure? It shows that the 2025 budget did not really have quite a number of investments we would have expected. Yes, the recurrent expenditure was done. We also understand that that budget may run to next month, March 2026.

“When we don’t invest as much as we should in our economy, development will be emaciated. Development will be stunted,” he said.

Alaje added that critical infrastructure and the economy at large would keep suffering without the necessary budget releases.

“If you don’t invest in the critical sector, it’s just an indication that our development as planned for 2025 is not there.

“Government is saying it is going to now do 60% or so of the budget in 2026. Well, I have a lot of doubts that government will meet that exact target. And if it does not, you will hear people use politics to explain it away. They will say after all, we did more than 2025. That’s one of the responses I am expecting to hear. But what matters are those roads that should be constructed, those rails that we needed to bring more money for, jobs that we needed to create, and industries that would have developed around capital expenditure.

‘Our governance system built on inefficiency’

The Executive Director of the Center for Fiscal Transparency and Public Integrity, Dr Umar Yakubu, said: “The problem with the current system of governance is that it is built on inefficiencies. That is why there are inefficiencies in terms of the number of MDAs. There are too many and they are not aligned for productivity or effectiveness in the 21st century. Why is that so?

“Meanwhile, critical agencies like the Ministry of Agriculture and the Ministry of Health are very important to national development. The Ministries of Education, Agriculture and Health are critical and important to national development but are at the mercy of what is released to them through the Budget Office and the Ministry of Finance,” he said.

Another civil society organisation, Coalition Against Corruption and Bad Governance (CACOBAG), said failure to finance capital budgets would undermine development.

“This has been the usual practice. It is either the budget is padded or some fictitious figures are inserted.

“If the MDAs go to the National Assembly to defend their budgets but there is nothing on ground to show what they have done in the past, you then ask yourself if that has not become a mere ritual,” he said.
(Daily trust)