Economic experts have lamented that despite fuel subsidy removal in 2023, the Federal government struggled to implement the 2024 budget, with the 2025 budget recording barely 30 percent implementation.
They said the continued delay in the implementation of the rollover and the current budget by the government posed a threat to capital projects.
Speaking at the weekend with the Nigerian Tribune, an economic expert, Eze Onyekpere, explained that under the current expenditure, “you have salaries and emoluments of public officers. So, the only people you can touch are those people who are working with government, which are very few.
“Another part of recurrent expenditure is debt, which is taking 53 percent of all our revenue. So, those ones are not impacting anybody. Now, the part of the budget that touches the lives of the people is the capital budget, particularly the developmental capital,” he stated.
Onyekpere said the developmental capital deals with building bridges, hospitals, schools, water facilities, improving electricity and agriculture.
“So, if you are not implementing capital projects, that means you are only running the bureaucracy, paying salaries, paying debts. You are not doing projects that will impact the life of the original people.”
He explained, ‘Don’t forget that it is from the capital budget that you also buy bullets, buy arms, which, after paying salaries of the soldiers and the military and the police, they also need equipment to be able to work. So, if you are not funding that, there is no way they will be performing optimally.
“So that is the danger of not implementing the capital budget. We are being told that the resources are improving, that the money is there. So why is the government not implementing the budget if the money is there?” He questioned.
The Economic Expert further explained that part of the Ease of Doing Business is building the roads that transport the goods, or that there are good railways, or that we have constant 24-hour electricity instead of factories having to run a generator or start producing their own mini grids to power production, causing commodity price increases.
It is reported that only 30 percent of the 2025 capital budget was funded and executed during its initial cycle due to revenue shortfalls. 70 percent of the unexecuted 2025 capital projects were deferred and rolled over into the 2026 capital budget framework.
Also lamenting the non-implementation of the country’s budget, another Economic Expert and the Co-founder of BudgIT, Oluseun Onigbinde, said the current administration has declared more revenue with low capital releases.
“You don’t need to continue to roll the budget over and over. There are so many items you find in the budget that have no priority; they don’t make any developmental sense to the Nigerian people. For example, you are putting palaces in the budget.
“The Federal Government trying to build palaces, or investing in churches and mosques, or buying musical instruments for a church is not going to bring any developmental opportunity. So, there are multiple layers of these issues, and there is no coordinated fiscal program from the federal government.
“The federal government is raising revenues, but there are challenges. One is the issue of debt servicing cost. Because of the devaluation of the currency, debt servicing cost has skyrocketed. It’s around 17 trillion naira as of last year.”
He warned that debt servicing cost is not slowing down any time soon. So the federal government needs to reflect on its fiscal choices and ask itself, how do I generate more revenue? That is the first point.
The second point you have to ask is, how do I prioritise capital spending that gives us impact? And that starts from the budgeting process» he stated. During the Senate engagement with the Ministry of Finance recently, Senator Mohammed Tahir Monguno raised the alarm.
He questioned why capital projects and critical government programs appear to be lagging if revenue collections are exceeding projections. The senator also expressed concern over the reported absence of capital releases to security agencies and sought clarification on the retention of about 1.7 trillion naira from recent federation account allocations.
“We have exceeded the target of our revenue collection. It is inherently contradictory for government to woefully fail to implement the budget. Where are these revenues going to? If the budget, for example, the 2025 budget, has not been implemented, and we have to roll over 70 percent of 2025 to 2026, and that with the promise that 30 percent will be implemented before March.
«Up to March, even 30 percent was not implemented. National Assembly had to extend the lifespan of the budget up to September to allow the government to implement just 30 percent of the 2025 budget”, he lamented.
In response, the Minister of Finance and the Coordinating Minister of the Economy, Taiwo Oyedele, said for external loans, “we always need the approval of the National Assembly.
“So, what happens is, when we get the approval of the National Assembly, the media would rightly report it, and many people take that as money borrowed. When we now borrow the money, they report it again. So, in fact, I think it was last year when the National Assembly approved about $20 billion, which was based on MTEF. So, people add up big numbers as the money we have borrowed, and that is misleading in terms of the analysis.
“We are currently finalising this breakdown in the Ministry of Finance. We’ll make it available to the public. It will show how much the National Assembly approved and how much of what we have borrowed, and how it has been spent,” he stated.
Analysts believe that the low budgetary implementation, particularly the capital project aspect, has denied many citizens the benefits of the fuel subsidy removal, as only a few who have direct business to do with the government may have gained from the policy.
- Source: Nigerian Tribune
