The Federal Ministry of Finance has clarified that capital projects across Nigeria remain active despite concerns over low cash releases to ministries, departments, and agencies.
While budget execution rates for some MDAs may appear low, capital project implementation has not been abandoned, the ministry said.
The clarification, detailed in a document titled “Deepening Public Understanding of Nigeria’s Fiscal Position: Context and Background” and signed by Dr. Ogho Okiti, Special Adviser to the Minister of Finance, highlighted that focusing solely on MDA cash releases provides an incomplete picture of federal capital expenditure.
According to the ministry, total capital expenditure in 2024 reached N11.59 trillion, about 84 percent of the capital budget, while provisional figures for 2025 show spending of roughly N11.7 trillion, or 76 percent performance.
“These figures demonstrate that capital projects are ongoing. The financing mix differs, but implementation has not been abandoned,” it said.
Federal capital spending is financed through direct MDA budget releases and project-tied funds from development partners. While government revenue constraints can slow direct disbursements, funds from multilateral partners often bypass federal accounts, meaning cash release figures alone may misrepresent project status.
The clarification followed queries from the Senate and House of Representatives during deliberations on the 2026 budget. The ministry attributed fiscal pressures primarily to oil and gas revenue shortfalls.
Projected Federation oil revenue for 2025 was N37.4 trillion, but actual inflows were about N7 trillion, representing 19 percent performance. Since the federal share of oil revenue is higher than other sources, such shortfalls significantly affect federal finances.
Rising debt service obligations, which reached N12.63 trillion in 2024 and N14.57 trillion in 2025, were linked to exchange rate depreciation and higher domestic interest rates rather than fiscal mismanagement.
Part of the public debt increase also reflects recognition of 30 trillion in previous Ways and Means advances and exchange rate valuation adjustments.
Despite pressures, the ministry said the government continues to prioritise debt servicing, salaries, pensions, and capital investment while avoiding monetary financing.
Federal revenue has improved from N12.48 trillion in 2023 to about N22 trillion by November 2025.
“The evidence shows revenue is rising, capital projects are ongoing, debt growth is largely accounting and exchange-rate driven, and monetary financing has ended. Nigeria is not experiencing fiscal collapse; it is undergoing fiscal correction,” the ministry stated.
