| dc.description.abstract | Recent data from the World Bank Nigeria Development Update (April 2026) indicates a continued decline in Nigeria’s fiscal space for development-oriented expenditure, with capital spending falling from 1.3% of GDP (₦5.5 trillion) in 2024 to 1.0% (₦4.5 trillion) in 2025, representing a reduction of approximately ₦1 trillion within a single fiscal cycle. This contraction is attributed to rising recurrent expenditure pressures, increasing debt service obligations, significant statutory deductions at source, and expanded intervention-related spending. As a result, recurrent expenditure now accounts for about 6.7% of GDP (₦29.7 trillion), substantially crowding out investment in infrastructure and productive sectors.
In addition to declining fiscal space, capital budget execution remains weak, with only about 24% of prorated capital allocations implemented in 2025. This reflects both funding constraints and systemic inefficiencies in budget implementation. The World Bank further identifies structural weaknesses in Nigeria’s budget process, including delayed budget passage, weak executive–legislative coordination, frequent unplanned budget adjustments, and limited macro fiscal anchoring, all of which undermine effective capital project planning and delivery. These challenges are compounded by repeated extensions of capital budget implementation timelines and growing concerns over stalled or abandoned infrastructure projects nationwide.
Despite rising aggregate public expenditure, Nigeria continues to face a structural fiscal imbalance characterised by a shrinking share of capital spending, over-expansion of recurrent costs, weak budget execution, and poor linkage between budget size and development outcomes. Consequently, increased spending has not translated into commensurate improvements in infrastructure delivery, productivity, or economic growth.
These trends highlight a growing risk of fiscal inefficiency, where limited capital investment capacity constrains long-term development while recurrent obligations continue to expand. Without corrective measures, Nigeria risks perpetuating a cycle of high expenditure with low developmental impact.
Given its constitutional mandate over appropriation and oversight, the National Assembly has a critical role in restoring fiscal discipline, improving budget credibility, and ensuring that public expenditure delivers measurable development outcomes. Legislative intervention is required to strengthen capital budget execution, improve transparency in deductions at source, and ensure a more balanced allocation between recurrent and capital spending.
Accordingly, the National Assembly, through its Committees on Appropriations, Finance, National Planning, and Economic Development, may consider the following actions:
● Convene a joint fiscal accountability hearing involving the Ministry of Finance, Budget Office, Office of the Accountant-General, Debt Management Office, and development partners to review fiscal trends and capital spending performance.
● Mandate quarterly reporting on capital budget implementation, including releases, utilisation rates, project-level progress, and causes of delays.
● Conduct a legislative audit of all deductions at source and intervention funds to assess their impact on available capital expenditure.
● Strengthen budget discipline by ensuring timely passage of annual budgets and limiting post-approval amendments that distort fiscal planning.
● Establish a transparent, publicly accessible capital project tracking system to improve accountability and monitoring of national infrastructure projects.
● Require performance-based justification for any extension of capital budget implementation timelines.
● Strengthen oversight of debt accumulation and recurrent expenditure growth to ensure compliance with fiscal sustainability frameworks. | en_US |
