Nigeria's Capital Spending to Drop by N1 Trillion in 2025
• Punch Newspapers • Business
The World Bank has reported that Nigeria's capital spending is set to decrease by N1 trillion, reflecting a fiscal squeeze that is limiting the government's ability to invest in infrastructure. The capital spending is projected to drop from N5.5 trillion in 2024 to N4.5 trillion in 2025, representing a decline of 1.3% and 1.0% of GDP, respectively. This reduction comes amidst a 6.7% increase in overall government spending, driven by higher personnel costs and debt servicing obligations. The report highlights that recurrent expenditures continue to absorb available fiscal resources, making capital spending the primary adjustment tool to manage fiscal pressures. The budget process in Nigeria is characterized by structural weaknesses, including delays in budget approvals and poor coordination between legislative and executive arms, which further exacerbate the challenges in capital project execution. The 2025 budget was approved six weeks into the fiscal year, and the Senate has extended the implementation of capital components until June 30, 2026, to address these issues.
Topics: Economy, Infrastructure