MINISTERS overseeing critical infrastructure and service-delivery agencies are grappling with a severe funding crisis after new figures revealed that less than N1tn was released for capital projects in the first seven months of 2025.
An analysis of data from the Budget Office of the Federation shows that while N18.53tn was appropriated for capital expenditure for Ministries, Departments and Agencies (MDAs) and related entities in 2025, actual releases between January and July amounted to just N834.80bn.
The figure represents only 7.72 per cent of the pro-rata benchmark of N10.81tn expected within the seven-month window leaving a staggering shortfall of nearly N9.98tn.
The broader capital expenditure picture paints an equally troubling scenario. Of the N23.44tn aggregate capital expenditure approved for 2025, a pro-rata N13.67tn was expected to have been spent by July. Instead, total capital spending stood at N3.60tn, a 73.7 per cent shortfall relative to expectations.
In its Medium-Term Expenditure Framework and Fiscal Strategy Paper (2026–2028), the Budget Office acknowledged the weak performance.
“Capital expenditure implementation was notably weak,” the document stated, attributing part of the slowdown to efforts to conclude the extended 2024 capital budget, which now runs until December 2025.
On the revenue side, the Federal Government recorded N13.67tn between January and July, well below the pro-rata target of N23.85tn. Oil revenues underperformed significantly, dragging down total collections despite improvements in Company Income Tax and VAT.
Notably, the N834.80bn released for MDA capital projects accounted for just 6.1 per cent of total revenue and roughly 4.1 per cent of total Federal Government expenditure of N20.40tn during the period.
Even within the N3.60tn total capital expenditure recorded, MDAs accounted for only about 23 per cent. A larger share N1.68tn flowed through multilateral and bilateral project-tied loans, highlighting growing reliance on externally linked financing.
The funding squeeze has severely impacted key ministries.
At the Federal Ministry of Health and Social Welfare, only N36m of the N218bn capital allocation for 2025 was released.
Minister of Health, Prof. Mohammed Pate, disclosed this during a budget defence session before lawmakers, blaming cash flow constraints and systemic bottlenecks.
“Out of the N218bn appropriated to the health sector… only N36m was released,” he said, noting that personnel costs were fully funded but capital projects stalled due to funding gaps and delays in counterpart contributions for donor-supported programmes.
Similarly, the Federal Ministry of Transportation received about one per cent of its N256.73bn capital allocation.
Minister Senator Saidu Alkali told lawmakers that nearly 70 per cent of projects had to be rolled over into 2026 due to delayed releases.
He said overhead utilisation stood at 59 per cent, while capital releases hovered at about one per cent often without corresponding cash backing.
The Federal Ministry of Marine and Blue Economy also recorded severe shortfalls, receiving only N202m of its N3.53bn capital allocation just 1.7 per cent.
Minister Adegboyega Oyetola said discussions were ongoing with the Ministry of Budget and Economic Planning to address the gaps, especially as the government seeks to diversify through the blue economy.
The crisis triggered heated exchanges at the National Assembly, where the Senate Committee on Finance grilled the Accountant-General of the Federation, Dr. Shamseldeen Ogunjimi.
Committee Chairman Senator Sani Musa criticised what he described as poor fund releases and questioned the effectiveness of the envelope budgeting system.
Senator Danjuma Goje described the situation as “embarrassing and baffling,” citing rising complaints from contractors over unpaid executed jobs.
Responding, Ogunjimi said funds could only be disbursed when available and noted that the “Ways and Means” financing previously used had been discontinued for macroeconomic stability reasons.
Legislative consultant Akinloye Oyeniyi accused the Federal Ministry of Finance of prioritising recurrent expenditure over capital releases, arguing that such a strategy prevents immediate crises but slows development.
“When you hold on to the capital, it will not totally affect the workings of government. But when you hold on to the current, there is going to be a crisis,” he said.
However, the Minister of Budget and Economic Planning, Senator Abubakar Bagudu, rejected claims that the 2025 budget is in disarray.
Speaking publicly last week, Bagudu argued that revenue and expenditure mismatches are common in democracies and that Nigeria’s fiscal pressures are not unusual in a challenging global economic environment.
“In some years, even when oil prices were 147, our capital budget performance was significantly lower than 40 per cent,” he noted, adding that reforms are underway to stabilise public finances.
For ministers tasked with delivering visible development outcomes under President Bola Tinubu’s Renewed Hope Agenda, the funding squeeze presents one of the administration’s most pressing fiscal challenges in 2025.