The Federal Government has once again plunged its fiscal operations into disarray, ordering ministries, departments, and agencies to roll over 70 per cent of the 2025 capital budget into 2026.
This directive, outlined in the 2026 Abridged Budget Call Circular from the Ministry of Budget and Economic Planning, prioritises completing ongoing projects amid weak revenues and inflation pressures.
Only 30 per cent of 2025 capital allocations will be released this year, with the rest forming the backbone of next year’s spending. No new projects are allowed.
This development extends the budgetary carry-overs begun in 2023, as only 20 per cent of the capital components of the 2025 budget have been released as of August. Indeed, the 2023, 2023 supplementary, 2024 and 2025 budgets are still running concurrently just days before this fiscal year ends. This is chaotic.
While the government has framed the latest directive as fiscal prudence, it exposes deep-seated flaws in budget preparation and execution. It signals fiscal indiscipline, a chronic failure that stifles infrastructure development, chokes businesses, and undermines Nigerians’ well-being.
The government attributes the decision to revenue shortfalls and the need to align with priorities like national security, economy, education, health, agriculture, infrastructure, power, energy, and social safety nets for women and youth in all 8,809 wards under its Renewed Hope Agenda.
The circular cites rising debt service, from N13.94 trillion in 2025 to N15.52 trillion in 2026, and a tighter overall envelope of N54.46 trillion available for the 2026 federal budget.
Aggregate capital expenditure drops sharply to N22.37 trillion from N26.19 trillion, with MDA capital falling from N12.39 trillion to N8.67 trillion and project-tied loans halving to N2.05 trillion. The deficit balloons to N20.12 trillion, up from N14.10 trillion.
The underlying assumptions of the budget include an oil benchmark price of $64.85 per barrel and an anticipated daily production target of 2.06 million barrels from the oil sector. However, the budget conservatively uses a benchmark of 1.8 million barrels to account for potential unexpected production disruptions, along with an exchange rate of N1,512 per $1.
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, admitted on Tuesday that the Federal Government recorded a N30 trillion revenue shortfall in 2025, making just N10.7 trillion compared with the projected N40.8 trillion, underscoring the fiscal crisis.
Yet, as Sheriffdeen Tella, an economics professor at the Olabisi Onabanjo University, notes, “There is no basis for any budget because what they had, they have not implemented.”
With the 2025 implementation barely underway in December, projecting a N20 trillion deficit lacks an empirical foundation.
It is troubling that this rollover departs from the January-to-December budget cycle, which was restored under the previous Muhammadu Buhari administration but now derailed under President Bola Tinubu.
In addition, the late submission to the parliament flagrantly breaches the Fiscal Responsibility Act, which specifies that the proposals be laid before the chambers not later than September, the third time under Tinubu.
Under the military, budgets were delivered without fail on January 1, with the Minister of Finance engaging the stakeholders in comprehensive breakdowns in the days following. It is an aberration that this culture of transparency is lacking under the so-called democracy. Nigeria should be going forward, not backwards.
In this era, budgets are opaque, more so as at least three budgets run concurrently.
MDAs rushed their respective budget submissions to beat the December 9 deadline via GIFMIS, and state-owned enterprises through the Budget Information Management and Monitoring System.
This deepens the confusion in the concurrent 2023, 2024, and 2025 budget implementation, which the administration says it plans to resolve. As it stands, the 2026 budget is already late and appears dead on arrival.
The President of the Nigerian Economic Society, Adeola Adenikinju, decries this as undermining predictability: “The 2026 budget should have been in the National Assembly for consultation so that we can keep to this January 1st thing. That makes our fiscal system predictable.”
Similarly, Tella noted that the late approval of the Medium-Term Expenditure Framework, almost six months after the June deadline, will result in rushed scrutiny of budgetary provisions and allocations.
It will allow National Assembly padding just like the 11,122 projects worth N6.93 trillion smuggled into the 2025 budget, including scandalous allocations such as N393.29 billion for 1,477 streetlight projects at an average cost of N266 million per unit!
The World Bank has long flagged such disruptive practices. In its 2023 Nigeria Development Update, it warned that “persistent delays in budget approval and execution… erode fiscal credibility and complicate private sector planning.”
Similarly, the IMF’s 2024 Article IV Consultation notes Nigeria’s budgets suffer from “unrealistic revenue assumptions and poor execution,” leading to implementation rates below 50 per cent for capital votes.
A Collaborative Africa Budget Reform Initiative study identifies failures, including delays in preparation and the late passage of appropriation bills by the National Assembly, overambitious project lists, corruption, weak oversight, the non-release of CAPEX funds, diversion of funds to unbudgeted items, and project abandonment due to procurement bottlenecks.
BudgIT, a civic-tech NGO, echoes this, criticising “inflated figures without visible improvements” and concurrent budgets that breed confusion.
Despite N107.2 trillion appropriated since 2023, only 20 per cent (N4.99 trillion) of 2025’s N24.9 trillion capital was spent by mid-year, according to a PUNCH report. Unexecuted projects now exceed N17 trillion, badly affecting roads, power, healthcare, education and housing nationwide.
Development economist Aliyu Ilias of CSA Advisory calls it “poor fiscal discipline,” arguing that it denies citizens project benefits and invites corruption: “How do we know what they are rolling over?
The national debt has surged to N152 trillion from N97 trillion in late 2023, with debt service consuming 45 per cent of revenues, leaving little for growth. IMF data shows Nigeria’s capital spending averages just 3.5 per cent of GDP, far below the 7-10 per cent needed for emerging economies.
The World Bank’s 2024 Public Expenditure Review attributes this to “fragmented planning and weak monitoring,” and recommends the deployment of digital tools and MTEF deadline enforcement under the Fiscal Responsibility Act, 2007, which provisions are largely ignored.
The fallout of persistent poor budget planning and execution has been catastrophic. Infrastructure projects are stalled or abandoned by unpaid contractors, roads remain pothole-riddled, blackouts persist, and schools crumble, contrary to promises made under the Renewed Hope Infrastructure Plan.
Businesses suffer the most. Since private sector investment is largely tied to predictable fiscal signals, erratic budgets drive away investors. SMEs are hit by poor power supply and escalating logistics costs, which often lead to business collapse in a hostile environment.
However, Muda Yusuf of the Centre for the Promotion of Private Enterprise sees the rollover as “cleaning an anomaly” from backlogs, but admits that unrealistic assumptions plague planning efforts.
The government must clean up its budgeting process. It must enforce January-December cycles via legal deadlines, digitise GIFMIS for seamless releases, coordinate the Budget and Economic Planning and Finance ministries, and publish real-time implementation reports.
The parliament should ensure rigorous oversight of the budget, ensuring realistic revenue projections and underlying assumptions, rather than seeking its share through padding and frivolous “constituency projects”. Crucially, lawmakers must ensure that the government gets value for money.
Nigeria cannot borrow into oblivion with the fiscal deficit rising while projects remain stagnant. The government must refloat its finances by transparently disposing of assets, beginning with drainpipes like the NNPCL’s refineries, to reduce the deficit. The tax reforms should be carefully implemented to encourage compliance and higher inflows.
Crucially, the Tinubu administration must rein in waste and needless overheads. It must rise above political considerations by significantly cutting the government’s costs along the lines proposed in the Oronsaye report.
