There is a troubling funding squeeze that has been plaguing the central business of government, slowly but surreptitiously crippling infrastructure and development projects at the federal ministries, departments and agencies (MDAs).
And the silent grumbling is gradually getting loud among the top echelons of the civil and public services about the ebb and flow, the tailspin engendered by the development.
The funding squeeze, which is said to have seriously affected the 2024 and 2025 budgets’ performance, has not been that discernible all this while because it does not affect payment of salaries and emoluments. The recurrent votes, which cover overheads and other administrative expenditures, are being released as and when due.
The problem affects only the capital votes, which are allegedly being largely withheld by the Federal Ministry of Finance. Where there are capital releases at all, they are said to be done in trickles.
Because recurrent spendings are not affected, workers are getting their salaries and emoluments as and when due. And so, there is a modicum of peace and ease. Workers at the lower rungs may particularly not smell any whiff of discontent. But it is a facade. Unease rules the waves at the top level of government.
According to a legislative consultant, who is conversant with the situation, the problem began with the implementation of the 2024 budget. “While the administration initially saw a smoother budget implementation in 2023, problems began to surface in 2024,” he said, adding for emphasis: “When this government came in, in 2023, the budget was moving fine. In 2024, we started having all these ‘glitches’, where we see more of the release of a recurrent budget, part of the budget, and the capital part of the budget being withheld.”
He said the pattern has continued into 2025, citing the lamentations of ministers over the worsening cash squeeze. Indeed, ministers particularly superintending key infrastructure and service-delivery agencies have been bemoaning the acute capital drought that has left things prostrate, as the MDAs have received less than a cumulative N1trillion for capital projects in the first seven months of 2025.
The funds that have trickled down to the individual ministries are as miserably dismal as a drop in the ocean. Some of the ministers took turns last week to voice out their frustrations aloud before federal legislators in Abuja.
The Federal Ministry of Health and Social Welfare, for example, was unable to implement its 2025 capital budget because, according to the minister, Prof. Mohammed Pate, only N36million of the N218billion appropriated for the sector was released!
Pate, who spoke during the ministry’s 2026 budget defence before the House Committee on Healthcare Services, attributed the poor capital budget performance to cash flow constraints and systemic bottlenecks in the Federal Government’s budget execution process.
The minister told the committee:“Out of the N218billion appropriated to the health sector by the parliament for the execution of capital projects in the 2025 fiscal year, only N36million was released.”
According to Pate, while the ministry’s personnel budget for 2025 was fully released and utilised, the capital component suffered severe funding shortfalls, largely due to the bottom-up cash planning system operated by the Office of the Accountant-General of the Federation.
The minister further explained that delays in the release of Nigeria’s counterpart contributions to donor-supported health programmes also prevented the ministry from accessing certain counterpart funds, a development that exacerbated pimplementation challenges.
He lamented that the combined effect of these factors stalled the execution of the 2025 capital budget, despite the ministry’s readiness to roll out projects and interventions.
The Federal Ministry of Transportation has a similar miserable experience, as it received only about one per cent of the N256.73billion capital appropriated to it under the 2025 Appropriation Act. The minister, Senator Saidu Alkali, made this incredible fact known in Abuja during the ministry’s budget defence before the Joint Senate and House of Representatives Committee on Land Transport.
Alkali told the bewildered lawmakers that the 2026 proposal essentially builds on the 2025 budget, as nearly 70 per cent of projects had to be carried forward into the new fiscal year because of funding shortfalls and delayed releases.
According to him, the projects that rolled over have been reassessed and aligned with President Bola Tinubu’s Renewed Hope Agenda, with priority on completing ongoing works, safeguarding existing public investments, and maintaining progress in the land transport sector.
Providing details on implementation, Alkali stated that overhead utilisation in 2025 stood at about 59 per cent, while capital releases were around one per cent and, in most cases, were not supported by actual cash disbursements at all!
The Federal Ministry of Marine and Blue Economy also regaled the lawmakers with its own frustration over the capital drought. It lamented getting only N202million of its N3.53billion capital budget allocation in 2025, representing just 1.7 per cent of budgeted funds, while overhead releases stood at 35 per cent.
The minister, Adegboyega Oyetola, made the disclosure while defending the ministry’s budget before a joint sitting of the Senate Committee on Marine Transport and the House of Representatives Committees on Ports and Harbours; Maritime Safety, Education and Administration; Shipping Services; and Inland Waterways, Ocean and Fisheries.
An analysis of data from the Budget Office of the Federation’s Medium-Term Expenditure Framework and Fiscal Strategy Paper (2026–2028) indicated an abysmal outlook. For example, while N18.53trillion was appropriated for capital expenditure for “MDAs and others” in 2025, the January–July pro rata benchmark stood at N10.81trillion.
However, actual capital releases to MDAs and related entities during the period was only N834.80billion. That left a pro rata shortfall of about N9.98trillion and a performance rate of only 7.72 per cent within the seven-month window.
The broader capital picture was equally weak. Aggregate capital expenditure for 2025 was put at N23.44trillion with a pro rata expectation of N13.67trillion by July. Actual capital spending across the board stood at just N3.60trillion, representing a 73.7 per cent shortfall relative to the pro rata benchmark.
The acute capital drought, according to the legislative consultant, extends beyond the MDAs, even to constituency projects of lawmakers. “Even the National Assembly members, the Zonal Intervention Project (ZIPs) are not being funded. Those projects are not being funded,” he revealed.
The crisis does not spare security and intelligence agencies either. The Chairman of the Senate Committee on National Security and Intelligence, Yahaya Abdullahi, on Wednesday expressed concern that the security and intelligence agencies’ budget is still subject to the vagaries of the envelope system of budgeting rather than genuine needs and requirements.
The senator spoke when the Permanent Secretary, Special Services, Office of the National Security Adviser, Mohammed Sanusi, appeared before the committee for budget defence. The envelope system, Sanusi bemoaned, had imposed significant constraints on resource allocation to the intelligence community.
Abdullahi said security agencies needed to perform optimally and address the myriad of emerging security threats to national stability, adding that they needed to be properly funded.
The lawmaker said the non-release or partial release of capital funds allocated to security agencies in the 2024 and 2025 budgets was inappropriate.
He said: “This has, no doubt, impacted very negatively on their capacity to procure materials and modern security equipment as well as their operational capabilities.”
The abysmal capital releases were said to have elicited the recent protests in Abuja by federal contractors who claimed they were owed trillions of naira. The lawyers to the contractors also later protested that they were not being paid by their clients, because the Federalv Government had failed to pay their clients.
However, the poor capital releases may not be as deliberate as it is being painted in some quarters. It may be due to sharp revenue shortfalls, especially from the oil sector, which is the mainstay of the nation’s revenues. For example, the aggregate Federal Government’s revenue for January to July was put at only N13.67trillion, which is below the pro rata target of N23.85trillion.
Oil revenue is said to have underperformed sharply, dragging down overall collections despite improvements in some non-oil lines, such as Company Income Tax and VAT.
The capital releases to MDAs were, therefore, said to be relative to available resources. The N834.80billion spent on MDA capital projects accounted for just about 6.1 per cent of total Federal Government’s revenue of N13.67trillion during the period. It also represented roughly 4.1 per cent of the Federal Government’s total expenditure of N20.40trillion between January and July.
Even within the total capital envelope recorded, MDAs accounted for a relatively small share. Of the N3.60trillion in total capital expenditure during the seven months, the N834.80billion going to MDAs and related capital votes represented about 23 per cent.
A significant portion of capital spending instead is said to have flowed through multilateral and bilateral project-tied loans, which stood at N1.68trillion during the period, roughly double the amount released directly to MDAs.
This funding structure is said to underscore the Federal Government’s growing reliance on externally linked financing to sustain capital activity in 2025. This, in other words, explains the government’s seeming penchant for borrowing.
We admonish that government’s financial eggheads pull all the stops to frontally tackle the challenge to shore up capital releases to MDAs so they could resume their vibrant profile of infrastructure and development projects.
The recent executive order signed by President Bola Tinubu ordering direct remittance of oil and gas revenues to the Federation Account is believed to be part of government’s bold efforts to address the acute funding squeeze by curbing wastes, especially in the operations of the Nigerian National Petroleum Company Limited (NNPL) and redirect resources to critical areas of need.
Specifically, the president signed the executive order pursuant to Section 5 of the Constitution of the Federal Republic of Nigeria (as amended), according to a statement issued by the presidential spokesman, Bayo Onanuga, “to safeguard and enhance oil and gas revenues for the federation, curb wasteful spending, eliminate duplicative structures in this critical sector of the national economy, and redirect resources for the benefit of the Nigerian people”.
This is laudable. Let the presidential intervention go the hog with a view to curbing profligacy and ostentatious excesses among political leaders, prioritizing capital spendings in some areas to redirect funds to enhance service-delivery and infrastructure in other peculiar areas of need.
