Capital Spending on MDAs Constrained by Over 15trn Gap

The Federal Government’s capital spending on ministries, departments, and agencies (MDAs) has been severely constrained over the last three fiscal years, with a cumulative gap of N15.21tn.

An analysis of data from the Budget Office of the Federation’s Medium-Term Expenditure Framework and Fiscal Strategy Paper reports showed that MDAs’ capital expenditure votes were persistently underfunded.

In 2023, the Federal Government budgeted N5.31tn for capital expenditure, but actual spending was N3.25tn, leaving a shortfall of N2.06tn.

The gap widened in 2024, with a budget of N11.21tn and actual spending of N5.81tn, leaving a deficit of N5.40tn.

In 2025, the capital expenditure budget was N18.53tn, but actual spending in the first seven months was only N834.80bn, a performance of 7.72%.

The underfunding is largely due to rising debt service obligations, which absorbed 83.15% of retained revenue in 2023 and 63.54% in 2024.

In the first seven months of 2025, debt service consumed 79.39% of retained revenue, leaving limited fiscal room for capital projects.

The Federal Government has promised to clear outstanding payments to contractors, who have been protesting over non-payment for completed and ongoing projects.

The government has also proposed extending the implementation of the 2025 budget to March 31, 2026, to allow for full release of capital allocations to MDAs.

Development economist Dr. Aliyu Ilias warned that the delays disrupt project execution and reduce credibility, making it harder for the government to coordinate reforms.

SOURCE: The PUNCH