Capital projects crumble as states cut spending
Procurement delays, worsening insecurity, and rising costs of goods and services have emerged as major reasons several state governments failed to meet their capital expenditure targets in the first six months of 2025, The PUNCH reports.
Findings from states’ second-quarter Budget Implementation Reports revealed that capital spending across many states remained significantly below expectations, despite ambitious budgetary provisions designed to accelerate infrastructure growth.
A fresh breakdown of state government expenditure between January and June 2025 showed that 31 states collectively disbursed N2.75tn for capital projects.
However, this figure represents only a fraction of the N17.51tn they had budgeted for capital expenditure in the 2025 fiscalProcurement delays, worsening insecurity, and rising costs of goods and services have emerged as major reasons several state governments failed to meet their capital expenditure targets in the first six months of 2025, The PUNCH reports.
Findings from states’ second-quarter Budget Implementation Reports revealed that capital spending across many states remained significantly below expectations, despite ambitious budgetary provisions designed to accelerate infrastructure growth.
A fresh breakdown of state government expenditure between January and June 2025 showed that 31 states collectively disbursed N2.75tn for capital projects.
However, this figure represents only a fraction of the N17.51tn they had budgeted for capital expenditure in the 2025 fiscal year. year.
The budget performance of those figures is about 15.7 per cent, meaning the 31 states achieved less than one-fifth of their capital expenditure target in the first half of 2025.
The underperformance has delayed critical infrastructure projects and deepened hardship for citizens who rely on improved roads, schools, hospitals, and water systems.
This is also coming on the heels of the fact that the states earmarked N11.34tn to finance capital projects but eventually recorded a funding gap of N3.98tn in 2024, as revenue shortfalls, rising wage bills, and heavy debt servicing weakened their fiscal capacity.
This year’s half-year performance suggests that the same structural challenges remain unresolved.
According to experts, capital spending is the fund disbursed by the state on long-term investments aimed at improving infrastructure, services, or the economy.
These expenditures are typically used for projects that have a lasting benefit, such as building roads, bridges, schools, hospitals, public transport systems, and other essential infrastructure to foster economic growth, improve quality of life, and ensure better public services for citizens.
The clamour for improved infrastructure has grown louder in the aftermath of the fuel subsidy removal and foreign exchange devaluation, which have significantly boosted revenue inflows to the federal, state, and local governments, raising public expectations for visible development outcomes.
Last month, President Bola Tinubu urged state governors to prioritise Nigerians’ welfare by investing more in their future, putting more money into rural electrification, agricultural mechanisation, poverty eradication, and improved infrastructure investment.
