Nigeria’s fiscal system is under scrutiny as capital budgets without cash continue to expose gaps between approved spending and actual fund releases to Ministries, Departments and Agencies.
Lawmakers raised concerns after multiple MDAs disclosed that only a fraction of funds approved for capital projects in the 2025 budget was released for execution.
The issue of capital budgets without cash came into focus during 2026 budget defence sessions at the National Assembly, where ministers and agency heads presented performance reports.
These sessions revealed a widening gap between appropriation and implementation, prompting lawmakers to question the credibility of Nigeria’s budgeting process.
Nigeria’s annual budgets typically allocate significant resources to capital projects such as infrastructure, healthcare, housing, and agriculture.
However, the effectiveness of these allocations depends on actual cash releases from the treasury, which have remained consistently low.
Findings presented at the National Assembly showed that only N9.13 billion, representing 1.3 percent, was released out of a combined N1.218 trillion capital allocation for eight ministries in 2025.
The trend of capital budgets without cash became more pronounced when the Minister of Health and Social Welfare, Muhammad Ali Pate, disclosed that his ministry received only N36 million, about 0.02 percent of the N218 billion approved for capital expenditure.
Similar patterns were recorded across several MDAs:
- Ministry of Women Affairs received N394.8 million, about 0.44 percent of its allocation
- Ministry of Transportation got N2.5 billion, about 1.0 percent
- Ministry of Housing and Urban Development received N2.0 billion, about 2.0 percent
- Ministry of Water Resources received N1.0 billion, about 1.5 percent
- Ministry of Agriculture and Food Security got N3.0 billion out of N120 billion
These disclosures confirm that capital budgets without cash have affected multiple sectors, leaving critical projects either stalled or unimplemented.
Officials from the Ministry of Finance attributed the shortfall to Nigeria’s cash-planning framework, which allows spending only when funds are available in the treasury.
However, fiscal analysts identified broader structural challenges driving the capital budgets without cash situation, including:
- Revenue shortfalls
- Rising debt servicing obligations
- High recurrent expenditure
- Weak cash-flow management
- Competing fiscal priorities
Nigeria’s growing debt servicing burden has significantly reduced available funds for capital development, limiting the government’s ability to fully implement approved budgets.
The persistence of capital budgets without cash has major implications for governance and economic development.
Key infrastructure projects in transportation, housing, and water resources have been delayed or rolled over into subsequent budgets.
In the health sector, planned hospital upgrades and procurement of medical equipment have stalled due to lack of funding.
A lawmaker warned that the trend could create a cycle where projects are repeatedly included in budgets but never executed, weakening public confidence in the budgeting system.
Budget analysts also cautioned that the disconnect between approvals and releases risks turning the national budget into what one expert described as a “speculative document rather than a spending instrument.”
The growing concerns over capital budgets without cash have triggered calls for reforms in Nigeria’s public finance management system.
Lawmakers are pushing for:
- Quarterly reporting on capital fund releases
- Stronger legislative oversight of treasury operations
- Improved cash management frameworks
- Better alignment between revenue projections and expenditure plans
Analysts have also stressed the need for better policy coordination within the government’s economic team to ensure that approved budgets translate into actual development outcomes.
