The National Assembly has criticised the Federal Government over the poor implementation of capital projects in the 2024 budget, describing the situation as unacceptable.
Lawmakers also expressed serious concern over the significant disparity between recurrent and capital expenditures and the low level of funds released for capital projects in ministries, departments, and agencies.
In response, the Senate and House of Representatives urged the economic team to urgently release more funds for capital projects to ensure that a significant portion of Nigerians benefits from government initiatives.
These decisions followed a joint session involving the Senate and House Committees on Appropriations and the Presidential Economic Team, presided over by Senator Olamilekan Adeola (APC, Ogun West) and Abubakar Bichi, chairmen of the Senate and House committees, respectively.
The session, which focused on the consideration of the 2025 Appropriation Bill, revealed a troubling disparity in expenditure implementation: only 25% of capital expenditure had been executed, compared to 43% for recurrent expenditure.
In his remarks, Senator Adeola called for a drastic reduction in the ratio of recurrent to capital expenditure. He advocated for a shift from the current allocation of about 80% to recurrent and 20% to capital, to at least a 60-40 ratio.
“Capital releases to MDAs are the major drivers of economic activities within the nation. Non-release of funds for capital projects is a major issue in the performance of the 2024 budget so far, and it is desirable that funds are released to prevent abandoned projects and ensure the success of the Renewed Hope Agenda of the president,” he stated.
He further cautioned MDAs against appearing for their 2025 budget defence with poor performance records due to non-implementation of their capital budgets. Adeola stressed the need for the finance ministry to release funds for capital projects within the remaining period of the 2024 fiscal year.
The chairman of the House Committee on Appropriations, Abubakar Bichi, echoed Adeola’s sentiments, urging more funding for capital projects such as schools, roads, dams, and hospitals, instead of prioritising recurrent expenditure items like debt repayment.
“Most of the items of recurrent expenditure, which takes a huge part of our budget and is implemented 100%, will only directly affect about 10% of our population. Meanwhile, capital projects will directly impact the majority of over 200 million Nigerians in areas of social infrastructure provisions such as hospitals, schools, roads, energy, and similar,” Bichi argued. He suggested restructuring debt repayment temporarily to prioritise capital expenditure.
In response, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, confirmed that outstanding capital funding would soon be released. He emphasised the importance of avoiding excessive spending beyond available resources, warning against the economic consequences observed in countries like France and Germany. Edun added that payment warrants for capital projects were already awaiting action.
The Minister of Budget and Planning, Alhaji Abubakar Bagudu, attributed the high recurrent expenditure to Nigeria’s developmental challenges, including military campaigns against insecurity. According to Bagudu, these efforts have improved agricultural production and economic activities.
Similarly, the Director General of the Budget Office, Dr. Tanimu Yakubu, highlighted that the large recurrent expenditure stems from past legacies, such as unpaid pensions and gratuities, which the current administration has addressed. Yakubu proposed future legislation by the National Assembly to limit the size of recurrent expenditure in budgets.
The meeting, attended by the Minister of State for Finance, Dr. Doris Uzoka-Anite, and permanent secretaries from the ministries of finance and budget and national planning, also examined issues surrounding waivers and tax holidays. These policies were noted to significantly reduce government revenue, further complicating budgetary challenges.
