By John Umeh
Only 15.7% of Capital Budgets Implemented in First Half of 2025
Procurement bottlenecks, worsening insecurity, and skyrocketing costs of goods and services have combined to derail capital expenditure plans across Nigerian states, leaving key infrastructure projects stalled midway through 2025.
Findings from second-quarter Budget Implementation Reports show that 31 states collectively spent ₦2.75 trillion on capital projects between January and June 2025. While the figure may appear substantial, it represents just 15.7 per cent of the ambitious ₦17.51 trillion states earmarked for capital investments in the fiscal year—far below expectations.
This underperformance has delayed critical projects in transportation, health, education, and water supply, worsening the hardship of millions of Nigerians who had hoped for visible improvements following last year’s fuel subsidy removal and foreign exchange reforms, which boosted government revenues at all levels.
A Pattern of Underperformance
The poor half-year execution mirrors 2024’s performance, when states budgeted ₦11.34 trillion for capital expenditure but ended up with a funding shortfall of ₦3.98 trillion due to revenue leakages, ballooning wage bills, and debt obligations. Analysts say the trend exposes deep-rooted structural weaknesses in Nigeria’s fiscal governance at the subnational level.
Despite these challenges, some states still made noticeable efforts to prioritize infrastructure. Imo State emerged as the biggest spender on capital projects, channeling ₦188.1bn into development compared to ₦50.29bn on recurrent costs. Enugu, with an 81.9 per cent capital-to-recurrent ratio, also stood out as the most capital-focused state, while Bayelsa, Kebbi, Abia, Edo, and Akwa Ibom recorded similarly strong allocations.
By contrast, states such as Kogi, Ekiti, Osun, and Oyo devoted more to recurrent expenditure, raising concerns that the bulk of their budgets went into salaries, allowances, and overheads rather than long-term projects.
Insecurity and Procurement Hurdles Stall Projects
In Benue State, where only ₦23.32bn was spent on capital projects compared to ₦44.5bn on recurrent, insecurity has been the main setback. Governor Hyacinth Alia admitted that widespread attacks made it impossible for contractors to mobilize, citing the killing of over 200 people in Yelwata community in June as a devastating blow to project delivery.
Other states pointed to delays in procurement as the major obstacle. Jigawa and Zamfara disclosed that many large-scale projects were still tied up in tender processes by mid-year, while Ebonyi said just 11.3 per cent of its capital budget was utilized because most big-ticket projects had been profiled for implementation in the third quarter.
Sokoto, with just 19.7 per cent performance, attributed its failure to “slow procurement and underperforming contractors,” though officials promised better monitoring in subsequent quarters. Similarly, Yobe cited bureaucratic delays, high inflation, and the rainy season as factors disrupting project timelines.
The Bigger Picture
Overall, states spent ₦2.35tn on recurrent costs in the same period—nearly matching the ₦2.75tn spent on capital projects. In fact, recurrent spending in 2025 already mirrors the extravagant pattern of 2024, when governors spent close to ₦2 trillion on allowances, refreshments, and foreign travel in just nine months.
Top recurrent spenders this year include Ogun (₦157.15bn), Kogi (₦133.22bn), Oyo (₦129.06bn), Kano (₦115.24bn), and Akwa Ibom (₦113.44bn). At the other end, Enugu (₦22.06bn), Katsina (₦26.39bn), Zamfara (₦37.57bn), Ebonyi (₦38.38bn), and Abia (₦39.73bn) recorded the lowest recurrent allocations.
Calls for Change
President Bola Tinubu, reacting last month, urged state governors to prioritize capital investments in areas that directly affect citizens’ welfare, including rural electrification, agriculture, education, and poverty alleviation.
“The economy is working, but we need to stimulate growth in the rural areas. Let us collaborate and do what will benefit the people,” the President said.
Economists, however, warn that unless governors tighten procurement systems, reduce administrative waste, and tackle insecurity, states will continue to underperform on capital projects despite improved revenues.
Professor Segun Ajibola of Babcock University observed that “high governance expenses and weak accountability at the state level” have meant that increased allocations rarely translate into real development for ordinary Nigerians.
Outlook
While most state governments remain optimistic that capital spending will “improve significantly” in the second half of 2025, analysts caution that unless procurement bottlenecks, insecurity, and fiscal indiscipline are urgently addressed, the year may end with another cycle of unfulfilled promises and stalled projects.
For now, citizens continue to wait for the roads, schools, hospitals, and public works that budget figures on paper have promised but reality on the ground has yet to deliver.
