Nigerian state governors are significantly increasing capital expenditure in their 2025 budgets to address infrastructure deficits. Despite past funding challenges, they aim to allocate a combined N17.51 trillion for infrastructure projects, driven by improved revenue allocations from the Federal Government. However, concerns remain about the states' capacity to execute these ambitious plans.
State governors in Nigeria have unveiled ambitious plans to significantly boost capital expenditure in their respective states. This comes as a response to the persistent infrastructure deficit across various sectors. The governors have allocated a total of N17.51 trillion to fund capital projects in their 2025 budgets, a substantial increase from the N11.34 trillion earmarked for similar projects in 2024. However, the 2024 budget faced funding shortfalls, resulting in a deficit of N3.
98 trillion last year. This allocation for infrastructure upgrades reflects a commitment to bolstering economic development in the coming two years, driven by improved revenue allocations from the Federal Government.The Federation Account Allocation Committee (FAAC) has witnessed a significant increase in statutory allocations to the three tiers of government, rising by N4.994 trillion to N15.12 trillion within the 12 months of 2024. This represents a 49.24 percent surge from the N10.143 trillion disbursed in 2023. Analysis of the FAAC communique reveals that the 36 state governments received the highest allocation of N5.22 trillion, accounting for 34.5 percent of the total allocation to all three tiers. Despite this windfall, states continue to grapple with financial constraints in fulfilling their mandate to deliver infrastructure projects for the benefit of their citizens. This financial shortfall has unfortunately led to delays in the implementation of numerous infrastructure projects, hindering efforts to improve crucial sectors like roads, healthcare, and education.An examination of the 2024 budget implementation reports for 32 states and the approved 2025 budgets for 35 states, sourced from official state websites and analyzed by our correspondent, sheds light on the scale of these challenges. The analysis reveals a concerning trend of shifting spending priorities towards recurrent costs and debt servicing, raising apprehensions about the long-term impact on economic development. Capital spending, which involves long-term investments aimed at enhancing infrastructure, services, or the economy, is crucial for fostering growth, improving quality of life, and ensuring better public services. Nine states, including Delta, Ekiti, Edo, Lagos, Rivers, Yobe, Osun, Bauchi, and Akwa-Ibom, achieved implementation rates exceeding 80 percent. Fifteen states fell within the 50 to 76 percent range, while eight states scored below 50 percent. Despite these financial constraints, states like Lagos, Niger, and Enugu stand out as frontrunners in planned capital expenditure, allocating the largest portions of their budgets towards infrastructure development. Lagos State, for instance, proposed the highest capital expenditure of N1.53 trillion, successfully spending N1.31 trillion, achieving an implementation rate of 85.5 percent. Conversely, Abia State, despite proposing N474.29 billion for its 2024 capital expenditure, managed to spend only N250.47 billion, reflecting a 52.8 percent implementation rate.
Infrastructure Capital Expenditure Nigeria State Governments Federal Government Economic Development
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