Capital Projects Not Abandoned, Says Finance Ministry Amid Budget Concerns

The Federal Ministry of Finance has clarified that Nigeria’s capital projects remain active despite perceptions of low cash releases to ministries, departments, and agencies (MDAs). While some MDAs show low budget execution rates, the ministry stressed that project implementation continues.

In a document titled “Deepening Public Understanding of Nigeria’s Fiscal Position: Context and Background”, signed by Dr. Ogho Okiti, Special Adviser to the Finance Minister, the ministry explained that relying only on cash release figures gives a partial view of federal capital expenditure.

Total capital spending in 2024 reached N11.59 trillion, about 84 percent of the approved capital budget, while provisional 2025 figures indicate N11.7 trillion spent, or 76 percent of the capital allocation. “These figures demonstrate that capital projects are ongoing. The financing mix differs, but implementation has not been abandoned,” the ministry said.

Federal capital expenditure comes from direct MDA allocations and project-tied funds from development partners. While revenue shortfalls can delay direct disbursements, multilateral funds often bypass federal accounts, making cash release data alone insufficient to gauge project progress.

The clarification follows questions from the Senate and House of Representatives on the 2026 budget. The ministry noted fiscal pressure stems largely from oil revenue shortfalls, with projected Federation oil revenue of N37.4 trillion in 2025, but actual inflows of only N7 trillion, a 19 percent performance rate.

Debt servicing obligations rose to N12.63 trillion in 2024 and N14.57 trillion in 2025, primarily due to exchange rate effects and higher domestic interest rates, rather than fiscal mismanagement. Part of the increase reflects N30 trillion in prior Ways and Means advances and accounting adjustments.

The ministry highlighted that the government continues to prioritise debt repayment, salaries, pensions, and capital investment, without resorting to monetary financing. Federal revenue has grown from N12.48 trillion in 2023 to about N22 trillion as of November 2025.

According to the ministry, “Revenue is rising, capital projects are ongoing, debt growth is largely accounting and exchange-rate driven, and monetary financing has ended. Nigeria is not experiencing fiscal collapse; it is undergoing fiscal correction.”

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