Emeka Moses
…faults zero implementation of 2026 MDA capital budget despite ₦68.32tn spending plan
The Chairman of the Alliance for Economic Research & Ethics (AERE), Dele Kelvin Oye, has warned that increased government spending ahead of the 2027 general elections could widen Nigeria’s fiscal deficit, heighten borrowing pressures and undermine the execution of projects captured in the national budget.
Oye, who raised the concern in an assessment of the Federal Government’s 2026 budget performance, said election-period spending was one of the major risks that could derail the country’s fiscal targets.
“There are four risks to watch closely. First, election-period spending can put pressure on the deficit and financing needs,” he said.
Oye, with more than 30 years of experience across public- and private-sector boards, served as President of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) and Chairman of the Organised Private Sector of Nigeria (OPSN).
“My years in business leadership and board service have taught me that a plan is credible only when responsibility, funding and delivery are visible,” he said.
He cited the World Bank’s October 2026 assessment, which identified higher pre-election spending as a factor that could widen Nigeria’s consolidated fiscal deficit in 2026.
“The World Bank identifies higher pre-election spending as one factor that could widen the consolidated deficit in 2026. That is a risk to manage, not a claim that every public project will be diverted for political purposes,” he said.
According to him, the government must exercise fiscal discipline, avoid fresh discretionary commitments that cannot be funded and delivered within a credible timetable, and ensure that available resources are directed towards completing essential projects.
“Public investment should be planned around what can be funded and completed, not merely what can be announced,” he said.
Oye was reacting to the implementation of the 2026 budget, which has an approved expenditure of ₦68.32 trillion, projected revenue of ₦36.87 trillion and a deficit of approximately ₦31.46 trillion.
“The approved deficit is about ₦85 for every ₦100 of projected revenue,” he noted, adding that the borrowing listed to finance it “are financing provisions, not proof that all funds have been raised or spent.”
He expressed concern that despite the substantial budgetary provision for capital expenditure, implementation of the 2026 capital budget for Ministries, Departments and Agencies (MDAs) remained at zero as of June 30, 2026.
“The most important point is to distinguish allocation from release, expenditure and completion,” he said.
According to him, the Budget Office’s second-quarter implementation report showed that government agencies were still utilising funds from the extended 2025 capital programme rather than commencing implementation of their 2026 MDA capital budgets.
“In the same report, implementation of the 2026 MDA capital budget remained at zero as at 30th June because agencies were still using funds from the extended 2025 capital programme,” he said.
He, however, clarified that the reported zero implementation related specifically to the 2026 MDA capital budget, while cumulative first-half capital expenditure across broader funding categories stood at ₦4.177 trillion.
“That total includes, among other items, 2025 capital carried into 2026, GOE capital expenditure, the Development Levy, TETFUND, project-tied loans and grant- or donor-funded projects,” he explained.
The AERE chairman also noted that the approved 2026 budget provided approximately ₦32.29 trillion for capital expenditure, representing about 47 per cent of the total spending plan.
“On paper, the allocation is substantial. But the capital allocation is not the same as capital delivered. That is an appropriation. It does not mean that the same amount has been released, spent or converted into completed assets,” he said.
He argued that budgetary allocations must translate into completed infrastructure and functioning public services rather than remain figures in government documents.
“A budget is not the value printed on its cover. It is the school opened, the road completed, the clinic equipped, the farm connected to a market and the business able to borrow and grow. That is the test Nigerians are entitled to apply,” Oye said.
Oye further warned that the continued implementation of the 2025 capital programme alongside the 2026 budget could complicate public spending oversight, project monitoring and accountability.
“That overlap makes it harder to answer a basic question: which budget year paid for a project, and what was delivered from that year’s appropriation? It can also complicate cost control and public oversight,” he said.
He called on the Federal Government to close the 2025 capital programme by the statutory deadline of December 31, 2026, and provide explanations for any outstanding liabilities.
“For the remaining weeks of 2026, the government should close the 2025 capital programme on the statutory date and explain any unresolved liability,” he said.
He also urged the government to avoid new discretionary commitments that could not be funded and completed within realistic timelines, while protecting essential projects that were ready for implementation.
“It should avoid fresh discretionary commitments that cannot be funded and delivered within a credible timetable, while protecting essential and ready projects,” he added.
Ahead of the 2027 budget, Oye called for a more disciplined approach to public expenditure, including realistic revenue projections, improved project readiness, transparent borrowing arrangements and stronger monitoring of capital projects.
“The 2027 budget should be prepared earlier, costed honestly and sized to the resources the country can realistically mobilise. It should also finish more of what Nigerians have already paid for,” he said.
He proposed that every project should have a publicly accessible record showing its location, contractor, amount appropriated, funds released and paid, independently verified physical progress and a completion certificate confirming that the asset was usable.
“My proposal is one public project record from approval to operation. Agencies, the National Assembly and civil society should work from the same record,” he said.
He maintained that Nigeria’s budgetary priorities should focus on completing viable ongoing projects before introducing lower-priority investments.
“This is not a call to stop every new project. It is a call to sequence projects honestly. Review existing commitments and complete viable projects before adding lower-priority work,” Oye said.
Oye also advocated a reduction in the country’s consolidated debt-service-to-revenue ratio to 40 per cent by 2028, from the World Bank’s reported 49.5 per cent baseline for 2025.
“I would support a pathway to reduce the consolidated debt-service-to-revenue ratio to 40 per cent by 2028. I choose it as an intermediate fiscal guardrail not because 40 per cent is a universal statutory threshold or a magic number,” he explained.
He said reducing the debt-service burden would create greater fiscal room for the government to address infrastructure, public services and other development priorities.
“At 40 per cent, a larger share of comparable revenue would remain for other public purposes, though it would not all be freely available for capital spending,” he said.
He stressed that the credibility of the 2027 budget would depend not on the size of its expenditure provisions but on the government’s ability to mobilise resources, manage borrowing and deliver measurable results to Nigerians.
“The 2026 budget’s lesson is not that Nigeria should stop aspiring. It is that ambition must be matched by the institutions, cash plans and public reporting needed to deliver it,” he said.
“As the proverb reminds us, a tree is known by its fruit. A budget, too, should be judged by what it delivers to the people.”
