The Federal Government of Nigeria has allocated only N4.99 trillion—just 20 percent of its N24.91 trillion 2024 budget—to capital projects, deepening public concern over inadequate investment in critical infrastructure and worsening fiscal imbalance.
While the 2024 budget marked a historic rise in government expenditure—N5.41 trillion higher than the previous year’s N19.5 trillion—most of the spending has gone into recurrent obligations, especially debt servicing and personnel costs, sidelining investments in roads, power, education, and healthcare.
Ireportmedia investigation shows that despite a 57 percent growth in retained revenue to N9.44 trillion this year, Nigeria faces a fiscal deficit of N15.47 trillion. The gap has been plugged primarily through borrowing, pushing the national debt burden higher and leaving little room for infrastructure expansion.
Experts say this fiscal trend threatens Nigeria’s long-term development goals and undermines President Bola Tinubu’s “Renewed Hope Agenda,” which promised renewed focus on capital development and infrastructure-led growth.
Although capital expenditure grew marginally from N4.49 trillion in 2023 to N4.99 trillion in 2024, its share of total spending dropped from 23% to 20%, signaling a downward shift in infrastructure prioritization.
This drop comes amid alarming infrastructure statistics: Nigeria’s infrastructure stock is only 30% of its GDP—less than half of the World Bank’s recommended 70%. A 2024 Agusto & Co. report estimated that Nigeria’s infrastructure deficit will balloon to $878 billion by 2040 if current trends persist.
“The nation’s budget is increasingly skewed toward consumption rather than development,” said Prof. Adeola Adenikinju, President of the Nigerian Economic Society. “Debt servicing is now crowding out capital investment—this won’t deliver growth.”
In 2024, Nigeria’s debt servicing costs surged to N11.6 trillion, up from N8.86 trillion in 2023, representing 47% of total expenditure. Combined with N4.49 trillion in personnel costs—up from N3.49 trillion—recurrent spending has now swallowed 65% of the budget.
Personnel costs account for 18% of total expenditure and are likely to keep rising due to wage adjustments and a growing public workforce.
“Servicing debt yields no tangible economic returns,” Prof. Adenikinju added. “It doesn’t build roads, doesn’t fund hospitals, and doesn’t enhance productivity. It’s a drain.”
Originally pegged at N28.78 trillion, the 2024 budget was later revised upward to N35.06 trillion to accommodate additional capital and recurrent expenses. President Tinubu requested an extra N6.2 trillion in spending—N3.2 trillion for infrastructure and N3 trillion for operational costs.
Yet, capital disbursements remain slow. Only N4.99 trillion has been released for capital projects, far below the revised N10 trillion target. This underfunding has prompted the National Assembly to extend the implementation of the capital portion of the 2024 budget until December 31, 2025.
This move, while aimed at salvaging delayed projects, has drawn criticism from economists and lawmakers who argue it shows weak execution capacity and undermines fiscal discipline.
Senator Solomon Adeola, Chairman of the Senate Appropriations Committee, advocated shifting the current 80:20 recurrent-to-capital spending ratio to at least 60:40. “Without capital releases, the Renewed Hope Agenda cannot succeed,” he warned.
Nigeria’s 2024 fiscal deficit has ballooned to N15.47 trillion—far exceeding the budgeted N9.18 trillion. The growing gap is a direct result of insufficient revenue to match the government’s expanding cost of governance, especially interest payments and salaries.
In January 2024, monthly retained revenue stood at N449.66 billion, rising to N1.52 trillion by December. But the revenue boom hasn’t kept pace with spending increases. The government continues to rely heavily on borrowing, thereby accumulating unsustainable debt obligations.
“This debt trajectory is dangerous,” warned Dr. Ayo Teriba, a financial analyst. “It leaves no room for future fiscal maneuvering and keeps us trapped in a cycle of debt and underdevelopment.”
In light of the growing infrastructure gap, the Federal Government is turning to Public-Private Partnerships (PPPs). At the 2025 Nigeria PPP Summit in Abuja, Infrastructure Concession Regulatory Commission (ICRC) Director-General Jobson Ewalefoh called for urgent collaboration.
“Nigeria is open for business and ready for partnerships,” Ewalefoh said. “With over 200 million people and a $2.3 trillion infrastructure gap, the opportunity for private investors is massive.”
But investors remain wary of inconsistent policies, delayed budget implementation, and weak institutional accountability—challenges that continue to plague Nigeria’s public finance management.
As Nigeria navigates another year of mounting debt and constrained infrastructure spending, stakeholders across the economic spectrum are demanding urgent reforms. Without a decisive shift toward capital investment and prudent fiscal planning, the government risks derailing development goals and prolonging hardship for millions of citizens.
With only 20% of a record N25 trillion budget spent on capital projects, critics argue that the Tinubu administration must act swiftly to align spending with economic growth priorities and deliver tangible impact across the country.