Ministers in charge of key infrastructure and service-delivery agencies are grappling with a severe funding squeeze, as figures obtained by The PUNCH showed that MDAs received less than N1tn for capital projects in the first seven months of 2025.

The data used for this report was the most updated available from the Budget Office of the Federation, as the agency had yet to release comprehensive full-year implementation figures, despite the fiscal year being well advanced.

Analysts and public finance experts have repeatedly criticised the Budget Office for delays in publishing up-to-date budget performance data and for what they describe as weak transparency standards in the dissemination of government fiscal information, particularly under the current administration of Bola Tinubu.

An analysis of data from the Budget Office of the Federation’s Medium-Term Expenditure Framework and Fiscal Strategy Paper (2026–2028) showed that while N18.53tn was appropriated for capital expenditure for “MDAs and others” in 2025, the January–July pro rata benchmark stood at N10.81tn.

However, actual capital releases to MDAs and related entities during the period amounted to just N834.80bn. That left a pro rata shortfall of about N9.98tn and a performance rate of only 7.72 per cent within the seven-month window.

The broader capital picture was equally weak. Aggregate capital expenditure for 2025 was put at N23.44tn, with a pro rata expectation of N13.67tn by July. Actual capital spending across the board stood at N3.60tn, representing a 73.7 per cent shortfall relative to the pro rata benchmark.

The MTEF/FSP document read as the Budget Office acknowledged that capital expenditure spending was weak in 2025: “Capital expenditure implementation was notably weak. Only N834.80bn had been released to Ministries, Departments, and Agencies out of the pro-rata capital budget of N10.81tn, indicating less than 10 per cent performance at the review period.

“The low capital expenditure is mainly due to the effort to meet the 2024 capital budget, which was extended to December 2025. Overall, the total capital expenditure reached N3.60tn as of July 2025, representing a shortfall of 73.7 per cent of the target for the first seven months.”

The numbers show that the capital drought was not occurring in isolation. On the revenue side, aggregate Federal Government revenue for January to July was N13.67tn, below the pro rata target of N23.85tn. Oil revenue underperformed sharply, dragging down overall collections despite improvements in some non-oil lines, such as Company Income Tax and VAT.

When placed side by side, the figures highlight how limited capital releases to MDAs were relative to available resources. The N834.80bn spent on MDA capital projects accounted for just about 6.1 per cent of total Federal Government revenue of N13.67tn during the period. It also represented roughly 4.1 per cent of the Federal Government’s total expenditure of N20.40tn between January and July.

Even within the total capital envelope recorded, MDAs accounted for a relatively small share. Of the N3.60tn in total capital expenditure during the seven months, the N834.80bn going to MDAs and related capital votes represented about 23 per cent.

A significant portion of capital spending instead flowed through multilateral and bilateral project-tied loans, which stood at N1.68tn during the period—roughly double the amount released directly to MDAs. This funding structure underscores the Federal Government’s growing reliance on externally linked financing to sustain capital activity in 2025.

While loan-backed projects continued to record spending, direct cash releases to ministries, departments, and agencies lagged far behind approved budgets. The result has been mounting frustration among ministers, particularly in sectors such as health, transport, and the blue economy, where recent disclosures have shown that only tiny fractions of approved capital allocations were released.

Ministers lament

The PUNCH earlier reported that the Federal Ministry of Health and Social Welfare was unable to implement its 2025 capital budget because only N36m of the N218bn appropriated for the sector was released, according to a disclosure by the Minister of Health, Prof Mohammed Pate.

Pate, who spoke during the Ministry’s 2026 budget defence before the House Committee on Healthcare Services, attributed the poor capital budget performance to cash flow constraints and systemic bottlenecks in the Federal Government’s budget execution process.

“Out of the N218bn appropriated to the health sector by the parliament for the execution of capital projects in the 2025 fiscal year, only N36m was released,” the minister told the committee.

He also informed lawmakers that while the Ministry’s personnel budget for 2025 was fully released and utilised, the capital component suffered severe funding shortfalls, largely due to the bottom-up cash planning system operated by the Office of the Accountant-General of the Federation.

The minister further explained that delays in the release of Nigeria’s counterpart contributions to donor-supported health programmes also prevented the Ministry from accessing certain counterpart funds, compounding implementation challenges. According to him, the combined effect of these factors stalled the execution of the 2025 capital budget, despite the Ministry’s readiness to roll out projects and interventions.

The PUNCH also learnt that the Federal Ministry of Transportation received only about one per cent of its N256.73bn capital allocation under the 2025 Appropriation Act.

The Minister of Transportation, Senator Saidu Alkali, made this known in Abuja during the ministry’s budget defence before the Joint Senate and House of Representatives Committee on Land Transport.

He noted that the 2026 proposal essentially builds on the 2025 budget, as nearly 70 per cent of projects had to be carried forward into the new fiscal year because of funding shortfalls and delayed releases.

According to him, the projects that rolled over have been reassessed and aligned with President Bola Tinubu’s Renewed Hope Agenda, with priority on completing ongoing works, safeguarding existing public investments, and maintaining progress in the land transport sector.

Providing details on implementation, Alkali stated that overhead utilisation in 2025 stood at about 59 per cent, while capital releases were around one per cent and, in most cases, were not supported by actual cash disbursements.

The PUNCH also reported that the Federal Ministry of Marine and Blue Economy got only N202m of its N3.53bn capital budget allocation in 2025, representing just 1.7 per cent of budgeted funds, while overhead releases stood at 35 per cent.

The Minister of Marine and Blue Economy, Adegboyega Oyetola, said this while defending the ministry’s budget before a joint sitting of the Senate Committee on Marine Transport and the House of Representatives Committees on Ports and Harbours; Maritime Safety, Education and Administration; Shipping Services; and Inland Waterways, Ocean and Fisheries.

Oyetola also said engagements were ongoing with the Ministry of Budget and Economic Planning to address funding gaps, in line with the Federal Government’s drive to diversify the economy through the blue economy.

The Minister of Women Affairs and Social Development, Imaan Sulaiman-Ibrahim, also lamented the zero release of the capital component of the ministry’s 2025 budget.

Sulaiman-Ibrahim, on Monday, appeared before the Senate Committee on Women Affairs to defend the ministry’s 2025 budget performance and proposal for the 2026 fiscal year.

According to her, of the N89.8bn approved for capital expenditure for 2025, only N394.8m was released. This, she said, represented 0.44 per cent release, with 99.56 per cent not released, a development the minister attributed to non-performance of the ministry’s capital projects.

Also, the Accountant-General of the Federation, Dr Shamseldeen Ogunjimi, came under intense scrutiny as the Senate Committee on Finance grilled him over zero capital allocations to several MDAs, non-payment of executed contracts, and complaints surrounding the Centralised Payment System.

The confrontation unfolded during the AGF’s budget defence session, where lawmakers expressed outrage over what they described as poor fund releases, poor budget implementation, and mounting contractor debts across MDAs and statutory bodies.

From his opening remarks, the Chairman of the Committee, Senator Sani Musa (Niger East), set the tone for a tense session, accusing the Office of the Accountant-General of maintaining an “unfriendly” posture towards the committee.

“We are not going to take your budget until we are satisfied that your office is ready to do things that will make things work for Nigerians through expected assurances from you.

“One of the issues that must be urgently resolved is the envelope budgeting system being used by the federal government every year but not producing desired results, requiring an alternative model like a performance-based one,” he said.

Senator Danjuma Goje (Gombe Central) said the legislature and Nigerians were embarrassed by the poor level of budget implementation since 2024, noting an unprecedented surge in complaints from contractors over unpaid jobs.

“Here at the National Assembly, we have never seen contractors bombarding us weekly for intervention on non-payment of executed contracts.

“Impression given to Nigerians and us and Nigerians by the government is that with the removal of subsidy and harmonisation of forex market, more revenue or more money, where is the money now? Why are contractors owed? And why was there zero allocation for capital votes of most of the MDAs in 2025?” he queried.

Goje described the situation as “very embarrassing and baffling.”

Responding, Ogunjimi attributed the crisis to what he described as indiscriminate contract awards by MDAs without confirmed funding, prompting a directive barring agencies from awarding contracts without available funds.

“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 fund is available because I must have the funds before I can disburse.

“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 said.

He acknowledged operational challenges with the Centralised Payment System but assured lawmakers that the issues were being addressed to ensure seamless implementation.

Legislative consultant Akinloye Oyeniyi has accused the Ministry of Finance of deliberately favouring recurrent spending over capital releases, arguing that the approach is slowing development and depriving Nigerians of the benefits of approved budgets.

Speaking on ARISE NEWS recently, he alleged that MDAs are being denied funds for infrastructure and other projects, even as salaries and administrative expenses continue to be paid, adding that responsibility ultimately rests with the Presidency and the finance authorities.

“The problem is coming from the ministry. I have to tell you, it’s coming from the ministry. It’s not coming from anywhere. It’s from the ministry. It’s from the Ministry of Finance,” he said, dismissing earlier claims that blamed the former Accountant General for the delays.

Oyeniyi noted that the National Assembly has repeatedly summoned finance officials to explain the low capital releases and warned that the situation has forced repeated budget consolidations and rollovers. He also referenced protests by contractors who claim they are owed large sums because the government has not paid for executed projects, insisting that the pattern of withholding capital votes has persisted into 2025.

According to him, the ministry is prioritising recurrent obligations to avoid unrest, arguing that delaying capital projects attracts criticism but does not immediately disrupt government operations, unlike unpaid salaries.

“When you hold on to the capital, it will not totally affect the workings of the government. It will only paint a bad picture of the government to the populace. 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, earlier dismissed claims that the Federal Government’s budget is in disarray, insisting that while revenue pressures exist, the fiscal situation is not unusual.

Speaking last Wednesday on ARISE NEWS, Bagudu rejected assertions that the 2025 budget was in “shambles,” saying: “The budget, which you said is in shambles, no, I disagree with you.”

He added that Nigeria, like many democracies, is contending with revenue constraints and competing expenditure demands. “We are like many countries, we are struggling with many pressures to raise revenue to where it should fund our budget to 100 per cent, to ensure that we meet our obligations, particularly debt service.”

He explained that global economic headwinds were also affecting revenue flows and budget planning, noting that revenue and expenditure mismatches are not peculiar to Nigeria, describing them as “a fact of life in any budget system, particularly in a democratic system.”

He pointed out that even advanced economies have faced similar challenges, citing instances of budget shutdowns abroad, and recalled that capital budget implementation had historically been weak in some years.

“In some years, even when oil prices were 147, our capital budget performance was significantly lower than 40 per cent,” he said, arguing that the current situation must be viewed within a broader historical context. (The PUNCH)

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