Seven years (2018 and 2014) of data from the Budget Office reveal a stark pattern in Nigeria’s public spending: while capital expenditures average a performance rate of 76.9 percent, statutory payments, and recurrent expenditures consistently exceed budgeted levels, achieving 101.1 percent and 102.3 percent performance, respectively.
This discrepancy underscores how government priorities are skewed toward satisfying bureaucratic appetites rather than honouring the social contract with citizens.
The Federal Government recently proposed a staggering N47.5 trillion for the 2025 fiscal year. Despite its magnitude, this budget could balloon further, surpassing N50 trillion once adjusted by the National Assembly, according to analysts.
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In dollar terms, however, the budget represents a contraction—down from approximately $35.97 billion in 2024 to $27.96 billion in 2025, a 22 percent decline in a nation that has transitioned from import dependence to contributing 40 percent of its total trade.
Capital expenditure, which encompasses investments in infrastructure and public assets, consistently receives the smallest budget allocation and the least commitment.
Nigeria’s extensive infrastructure deficit remains a critical impediment to sectors like manufacturing, healthcare, and education. In a nation where capital investments could drive economic transformation, their prioritisation lags far behind that of recurrent costs, which cover the government’s day-to-day expenses.
Every Nigerian knows the inefficiency and endemic corruption that plague the handling of funds by Ministries, Departments, and Agencies (MDAs). One notorious case involved a ministry allegedly spending N16.4 billion on “bush clearing,” only to later state the figure was N2.5 billion.
Excessive travel expenses also reflect bureaucratic excess, prompting recent directives from the President to limit government convoy vehicles and the President himself reduced his delegation sizes for foreign trips.
The Government also could however take it further by reconsidering the Oronsaye report —created to address the challenges of Nigeria’s bloated public service and inefficiency within federal agencies.
“Nigeria’s extensive infrastructure deficit remains a critical impediment to sectors like manufacturing, healthcare, and education.”
As explored in a recent column by BusinessDay, bureaucrats and political leaders demonstrate a preference for ever-expanding budgets. Theories by scholars like Anthony Downs and William Niskanen suggest that bureaucrats often prioritise budget growth over efficiency or social good, exacerbating market failures where public goods are undersupplied.
To fulfil its 2025 pledge for a well-integrated, multi-modal transportation system—one that is efficient, equitable, and environmentally sustainable—the government must realign its priorities toward infrastructure. Yet, this vision appears increasingly distant.
According to 2022 data from the African Development Bank (AfDB), Nigeria’s infrastructure gap is so severe that the country ranks 24th out of 54 African nations, with a deficit estimated at 75 percent.
Former President Muhammadu Buhari highlighted this issue at COP26 in 2021, stating that Nigeria requires $1.5 trillion over the next decade to bridge the infrastructure gap and achieve a competitive National Infrastructure Stock.
This ambitious target would require annual spending of $150 billion, yet the government has averaged only $7 billion in capital expenditure annually over the past three years—a sum that barely scratches the surface.
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Jude Chiemeka, CEO of the Nigerian Exchange Limited, emphasised the gravity of this situation, noting that Nigeria’s infrastructure investment, currently at 30 percent of GDP, falls short of the 70 percent international benchmark recommended by the World Bank. The fundamental issue lies not only in financial constraints but in a lack of political will and commitment to long-term investment.
Alternative funding strategies have been suggested, including leveraging the capital market through stocks, bonds, and venture capital.
A recent example saw the government raise $900 million via a dollar bond sale, with proceeds designated for critical projects and oversight from both the President and the National Assembly to ensure effective utilisation.
While private sector involvement is essential, particularly through public-private partnerships, infrastructure is inherently a public good. This means the government must lead these investments, as market forces alone may not adequately meet public needs.
To bridge Nigeria’s infrastructure gap and enable sustainable development, the government must reframe its budgeting approach—moving beyond recurrent expenses and bureaucratic appetites to prioritise lasting investments that serve the public good. Only then can Nigeria hope to overcome its infrastructure challenges and realise its development potential.
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