Lawmakers in the National Assembly have raised concerns over the low funding of capital projects in the 2024 budget, describing it as a major obstacle to achieving visible development across the country. They emphasized the need for a significant shift in government spending priorities to ensure that Nigerians benefit directly from government activities.
At a joint session held on Wednesday between the Chairmen of Senate and House Committees on Appropriations and the Presidential Economic Team, Senator Solomon Adeola and Hon. Abubakar Bichi expressed dissatisfaction with the current budget structure, which prioritizes recurrent expenditures over capital projects.
Lawmakers Call for Structural Budget Changes
Senator Adeola, representing Ogun West Senatorial District, criticized the current 80:20 ratio between recurrent and capital expenditures, calling for a drastic shift to a 60:40 ratio. He argued that capital projects are the most effective way to stimulate economic growth and improve the lives of citizens.
“Capital releases to MDAs (Ministries, Departments, and Agencies) drive economic activities and development across the nation,” Adeola stated. “The non-release of funds for capital projects is a significant factor in the poor performance of the 2024 budget so far. Funds must be released to avoid abandoned projects and ensure the success of the Renewed Hope Agenda.”
He warned MDAs not to approach their 2025 budget defense with records of poor performance, stressing that effective implementation of capital projects is key to public confidence in the government.
Hon. Bichi echoed these sentiments, highlighting the imbalance between recurrent and capital expenditures. “Most recurrent expenditure items, which have achieved near 100% implementation, directly benefit only about 10% of the population. In contrast, capital projects in healthcare, education, infrastructure, and energy directly benefit the majority of over 200 million Nigerians,” Bichi stated.
Budget Expansion and Performance Concerns
The 2024 budget, initially set at N28.7 trillion, was revised upward to N35.06 trillion to accommodate N3.2 trillion for infrastructure projects under the “Renewed Hope” agenda and N3 trillion for additional recurrent expenditures. Despite this expansion, performance reports presented by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, showed underwhelming results.
According to Edun, while recurrent expenditures achieved a 43% implementation rate, capital expenditures lagged significantly at just 25%. He acknowledged the backlog of capital releases awaiting funding but cautioned against returning to unsustainable spending practices.
“We must avoid unsustainable fiscal approaches,” Edun said, citing fiscal crises in France and Germany as warnings for Nigeria.
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Challenges Driving Recurrent Expenditures
The Minister of Budget and National Planning, Atiku Bagudu, attributed the high recurrent expenditures to Nigeria’s ongoing developmental challenges and legacy issues. He specifically pointed to insecurity as a key factor straining government resources and affecting sectors like agriculture and economic productivity.
“Insecurity has not only diverted significant resources but has also hindered economic activities, particularly in agriculture, where millions of Nigerians depend for their livelihood,” Bagudu explained.
Director General of the Budget Office, Tanimu Yakubu, highlighted additional pressures from unpaid pensions and gratuities inherited by President Bola Tinubu’s administration. He noted that while progress is being made in addressing pension liabilities, these costs remain a major contributor to recurrent expenditures. Yakubu suggested that the National Assembly might need to legislate limits on recurrent expenditures in future budgets.
Tax Waivers and Revenue Concerns
During the session, participants also addressed the issue of tax waivers and holidays, warning that these policies, if not carefully managed, could further deplete government revenues. Minister of State for Finance Doris Uzoka-Anite and other officials present underscored the importance of balancing tax incentives with the need to fund critical projects.
A Call for Action
The National Assembly’s call for increased funding for capital projects comes at a critical time when many Nigerians are demanding tangible improvements in infrastructure, healthcare, and education. Lawmakers have urged the executive arm of government to prioritize projects that will have a direct impact on the majority of the population.
“We need to ensure that funds for capital projects are released on time and implemented effectively,” Adeola stated. “This is the only way to bring real development to our people.”
The meeting, attended by key government officials and stakeholders, ended with a shared commitment to review the budget structure for 2025 and address the recurring challenges in funding capital projects.