Nigeria's State Capital Spending Drops 58% Amid Politics

In the first quarter of 2026, capital expenditure by 26 state governments in Nigeria decreased by 58.1%, amounting to ₦2.19 trillion, down from ₦3.79 trillion in the fourth quarter of 2025. This decline raises concerns regarding the slow pace of infrastructure development and increasing fiscal pressures as political activities intensify ahead of the 2027 general elections.

An analysis of financial reports published on official state websites indicates that 31 states collectively spent ₦2.75 trillion between January and June 2025, with a notable contraction in spending amid growing political activities. The report highlights that 32 states and federal capital territories have accrued nearly $5.7 billion in external debt in 2025, despite increased inflows from federal allocations.

Lagos State retained its position as the highest spender on capital projects, investing ₦340.76 billion in the first quarter of 2026, while Oyo State recorded a significant increase in capital expenditure, rising to ₦231.27 billion, marking a 119.5% increase.