Nigeria's Capital Projects Receive Just 26% of Loans

In the first nine months of 2025, the Nigerian federal government spent N3.10 trillion on capital projects, which is only 26.07% of the total debt financing inflow of N11.89 trillion. This inflow included N7.08 trillion from domestic borrowing and N4.81 trillion from multilateral and bilateral project loans.

The actual capital expenditure fell short of the prorated target of N17.58 trillion by N14.48 trillion, indicating a significant gap in infrastructure spending. Notably, there was no recorded expenditure from multilateral and bilateral project loans despite a budget provision of N2.52 trillion for such projects.

The slow pace of project implementation has been attributed to cash management challenges and delays in project execution, raising risks related to project costs. Economists, including Dr. Muda Yusuf and Segun Kadir Ajayi, have expressed concerns about the increasing domestic borrowing crowding out the private sector, while Dr. Tanimu Yakubu emphasized that public borrowing should be a tool for macroeconomic management rather than a sign of fiscal recklessness.