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Nigeria kept its government running in 2024 but struggled to build the infrastructure needed to support growth, raising concerns over the West African nation’s budgetary priorities at a time when economic growth is direly needed to sustain reform gains.
Federal budget data show ministries largely met salary and overhead obligations while leaving hundreds of billions of naira in capital allocations unspent, stalling projects across power, roads, aviation and environmental protection.
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Capital expenditure, the portion of the budget meant to fund long-term assets, recorded weak execution across key infrastructure sectors, even as recurrent spending approached full utilisation. Economists say the pattern highlights a structural weakness in fiscal management, where administrative continuity is prioritised over development outcomes.
The Federal Ministry of Works, Housing and Urban Development, one of the largest recipients of capital funding, illustrates the challenge.
The ministry recorded an overall budget execution rate of 59.13 percent in 2024, spending about N710.45 billion out of a N1.20 trillion allocation. Personnel costs were utilised at 99.59 percent, while overheads were almost fully spent, signalling strong administrative stability.
Capital spending, however, lagged. Against a capital budget of N1.153 trillion, the ministry spent N662.18 billion, leaving about N490.95 billion unutilised, according to data compiled by civic-tech group, BudgIT. Capital execution stood at 57.42 percent.
BudgIT said the underspending meant that road construction, housing provision and urban development projects were either delayed or not initiated. “The budget performance shows that the ministry critically failed to execute its core mandate of large-scale infrastructure delivery,” the civic tech organisation said.
The shortfall has implications for an economy already grappling with high logistics costs and housing shortages estimated at over 28 million, limiting productivity gains and investment flows.
Power sector’s capital collapse
BudgIT data revealed that the power sector recorded one of the weakest performances in the 2024 budget cycle. Overall execution stood at just 5.21 percent, with N21.80 billion spent from a total allocation of N418.37 billion.
Recurrent expenditure provided a veneer of stability. Personnel costs achieved more than 90 percent utilisation, while overheads were nearly fully spent. Capital expenditure, which accounted for more than 98 percent of the sector’s total budget, collapsed almost entirely.
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Out of N411.15 billion earmarked for capital projects, only N15.03 billion was spent, representing a utilisation rate of 3.66 percent and leaving about N396.12 billion unspent.
The weak execution came despite the launch of the Presidential Power Initiative in February 2024, which aimed to raise transmission capacity and support higher electricity generation.
BudgIT said the failure to deploy capital funds virtually guaranteed the persistence of grid constraints and low power supply.
“Such a monumental variance signifies that virtually every major planned generation, transmission, and distribution project the very investments needed to stabilize and expand the national grid were not fully implemented.”
Aviation and environment follow similar pattern
Nigeria’s aviation sector executed 41.47 percent of its N57.23 billion budget in 2024. Personnel and overhead spending reached 97.4 percent and nearly 100 percent, respectively, while capital execution stood at 29.71 percent, leaving N33.29 billion unspent.
The underperformance occurred even as the sector navigated an external shock linked to more than $800 million in trapped airline revenues caused by foreign exchange shortages earlier in the year.
While the Central Bank of Nigeria later cleared the backlog, capital investment in airport infrastructure and navigational systems lagged.
The Ministry of Environment posted an overall execution rate of 37.25 percent, spending N41.29 billion from a N110.86 billion allocation. Recurrent spending again neared full utilisation, but capital execution was just 11.30 percent, with N69.47 billion left unused.
The funds were earmarked for erosion control, flood management and climate adaptation projects, areas analysts at BudgIT said are increasingly critical amid rising environmental risks.
Development deferred
Economists say Nigeria’s 2024 budget execution reflects a broader fiscal trade-off driven by revenue constraints and rising debt service costs. Capital spending, which is easier to postpone than salaries, became the adjustment lever.
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Matilda Adefalujo, an economics analyst at Lagos-based consultancy Meristem Research, argued that spending on capital investments is more of a “political willpower”, noting that shortfalls in developmental projects may hinder measurable outcomes such as roads, healthcare, and the creation of jobs.
“Capital spending helps quicken growth needed to stabilise the economy and boost productivity,” Adefalujo said, urging the MDAs to prioritise capital spending, expand revenue brackets, and be more fiscally disciplined to allow the gains of the revenue increase to be more felt by the citizens.
