Nigeria's 2026 Budgets Rise 47% Amid Capital Spending Drop

In 2026, Nigeria's 36 states and the Federal Capital Territory (FCT) raised their combined budgets by 47.5%, from N27.22 trillion in 2025 to N40.14 trillion. Despite this increase, the allocation for capital projects declined from 73.24% to 64.34%, indicating a shift towards recurrent expenditure.

In nominal terms, N25.83 trillion is allocated for capital expenditure, up from N19.94 trillion in 2025, but its share of total spending has decreased by nearly nine percentage points. This trend raises concerns about the states' ability to attract investment, particularly foreign capital, as reduced infrastructure spending may weaken the business environment.

The FCT increased its capital expenditure share to 76.19% in 2026, while the South-South region raised its capital spending from 58% to 70%. The North-West and North-East also increased their capital expenditures.

Analysts emphasize the importance of sustained investment in critical infrastructure for economic growth and productivity.