Nigeria’s delayed capital budget releases in 2025, now compounded by a slow take-off for the 2026 budget, have exposed a structural weakness in fiscal execution that continues to undermine the country’s investment drive and growth ambitions. As highlighted by PwC, the issue is not merely the size of the budget or deficits, but the persistent failure to release and utilise capital funds on time.
Key Implications
1. Slowed Infrastructure Delivery and Investment Momentum
Capital projects are the backbone of growth, crowding in private investment and boosting productivity. Delays in releases meant projects planned for early 2025 either stalled or spilled into 2026, stretching timelines, raising costs, and weakening investor confidence, particularly in infrastructure, energy, and transport.
2. Rising Cost of Governance and Project Inflation
Late funding increases project costs due to inflation, FX volatility, and contract variations. What could have been delivered cheaper and faster becomes more expensive, reducing value for money and shrinking the real impact of public spending.
3. Pressure on Contractors and the Private Sector
The accumulation of unpaid certified projects, estimated by contractors at about ₦4 trillion, has strained local construction firms, worsened cash flows, triggered layoffs, and increased non-performing loans in the banking sector. This weakens indigenous capacity and discourages future participation in public projects.
4. Distorted Planning and Overlapping Budgets
Running multiple overlapping budgets has blurred accountability across MDAs, complicated fiscal tracking, and weakened discipline in project selection and execution. It has also turned budgeting into a rolling exercise rather than a credible annual economic plan.
5. Delayed Growth and Jobs Creation
Public capital spending is one of the fastest channels for stimulating jobs and economic activity. Delays effectively reset Nigeria’s growth timeline, reinforcing PwC’s view that the ambition of building a $1 trillion economy has suffered a “time reset.”
The Way Forward
1. Enforce the Single Annual Budget Cycle
The planned transition to a single budget cycle from April 2026 must be implemented without compromise. Ending overlapping budgets will improve predictability, accountability, and execution speed across MDAs.
2. Prioritise Capital Releases Over New Announcements
Government must shift focus from announcing new projects to completing existing ones. Clearing verified contractor arrears should be treated as an economic stimulus, not just an accounting obligation.
3. Strengthen Revenue Administration, Not Rates
As PwC noted, the solution lies in efficiency, leveraging data, technology, and compliance enforcement across tax and customs systems, rather than raising tax rates in a fragile economy.
4. Expand Private Sector Participation
With limited fiscal space, Nigeria must accelerate asset monetisation, PPPs, and concession frameworks, especially in infrastructure, to reduce pressure on public capital budgets.
5. Improve Capital Expenditure Monitoring
Real-time tracking of capital releases and project milestones should be institutionalised, with consequences for MDAs that fail to execute approved projects within defined timelines.
Evidently, delayed budgets are no longer a technical issue; they are a growth risk. If Nigeria is to regain investment momentum in 2026 and beyond, fiscal discipline must move from budget formulation to budget execution. Without timely capital releases, even the most ambitious budgets will remain statements of intent rather than engines of economic transformation.
