IMF’s expose on off-budget spending casts fresh spotlight on coastal road

The recent disclosure by the International Monetary Fund (IMF) about the federal government’s off-budgetary expenditures has cast a fresh spotlight on the controversial Lagos-Calabar coastal road being undertaken by the government.

Christian Ebeke, the IMF’s resident representative in Nigeria, disclosed that the federal government engaged in extrabudgetary spending equivalent to two percent of the nation’s gross domestic product.

The Fund noted that these expenditures, which were primarily tied to major infrastructure projects, were executed outside the formal budget framework, masking the country’s actual fiscal deficit and true borrowing needs.

This disclosure has sparked speculations around the coastal road, which has been enmeshed in controversies around its procurement process, cost, funding source and social and Environmental Impact Assessment (SEIA).

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The coastal road is a 700-kilometre super-highway considered the most ambitious road infrastructure ever undertaken by any government in Nigeria. The highway is planned to run from Victoria Island, Lagos to Calabar, Cross River State, passing through Ogun State, Ondo State, Edo State, Delta State, Bayelsa State, Rivers State, and Akwa Ibom State, before ending in Calabar.

At the peak of the controversies surrounding its source of funding, David Umahi, the Minister of Works, whose ministry supervises the project, explained that the highway was not in the 2025 budget, noting, however, that the omission was an error.

“What you have in the budget was Lagos-Port Harcourt Highway; it is supposed to be Lagos-Calabar Highway, so we are interfacing with the committee chairman in this regard,” the minister was quoted to have said in a video clip on X (formerly Twitter).

Chukwuma Katchy, the managing partner, KPT Associates Limited, was also quoted as saying that the coastal road project is an EPC + F project that does not need to be included in the budget.

“It is an Engineering, Procurement, Construction, and Financing (EPC + F) project. The contractor is paid at the end of the project or the end of a phase. So it doesn’t have to be in the budget annually,” Katchy said.

Similarly, Babatunji Adegoke, an engineer, explained that the omission of the Lagos-Calabar Highway project from the 2025 budget might be linked to the use of an EPC+F model for its execution.

Johnson Chukwuma, a civil engineer, said, “Piecing all these together gives this project away as one of the beneficiaries of the extra-budgetary expenditures of the government as exposed by the IMF.

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According to Chukwuma, though the IMF did not mention specific projects on which the extra-budgetary spending was made, the government has not at any point come out clearly on the source of funding for the project.

The coastal highway has also sparked outrage over its cost, especially its per-kilometre cost of $15.7–17.9 million, which is said to dwarf the $1.65 billion budget for the 10,228 km Cairo-Cape Town Highway, adjudged to be Africa’s longest road, stretching across 10 nations at just $156,000/km.

Many Nigerians have criticised this outrageous cost, including former Vice President Atiku Abubakar, who, in 2024, labelled the disparity between the Nigerian coastal road and that of Egypt a “highway to fraud,” noting that the Nigerian project’s cost nearly matches the combined 2024 budgets of all 36 Nigerian states (N15.91 trillion).

Infrastructure development experts have lauded the project for its potential economic benefits, but point out that the cost and all the controversies surrounding its execution dent its noble intentions.