Edun confirmed that there are pending warrants awaiting payment for capital projects, but funding remains a key challenge.
The National Assembly has raised serious concerns about the significant imbalance between recurrent and capital expenditures and the low level of fund releases for capital projects for Ministries, Departments and Agencies (MDAs) in the 2024 national budget, with both chambers urging for more focus on capital projects that directly benefit the Nigerian populace.
This was disclosed Wednesday through a press statement signed by Mr. Kayode Odunaro, media adviser to the chairman of the senate committee on appropriation, Sen. Solomon Olamilekan (APC, Ogun West).
At a joint sitting with the presidential economic team, which included key officials such as Finance Minister Wale Edun, Sen. Olamilekan and Rep. Abubakar Bichi, chairman of the House committee on appropriations, criticised the ongoing underperformance in funding for capital projects. The meeting centered on the review of the 2025 appropriation bill and highlighted serious gaps in the 2024 budget’s capital expenditure.
These remarks followed the presentation of the economic team’s report, led by Edun who revealed that the overall 2024 budget performance was only at 43 perceng, with recurrent expenditure fully disbursed at 100 percent. In contrast, capital expenditure stood at just 25 percent, a performance rate described as inadequate by the National Assembly members.
Olamilekan pointed to the troubling 80:20 split between recurrent and capital expenditure, with the majority of funds allocated to recurrent costs. He urged a shift towards a more balanced distribution, recommending a 60 percent to 40 percent split, with more funding dedicated to capital projects, which are vital for economic growth and social development.
“Capital releases to MDAs are the major drivers of economic activities within the nation. Non release of funds for capital projects is a major issue in the performance of 2024 Budget so far and it is desirable that funds are released to prevent abandoned projects and ensure the success of the Renewed Hope Agenda of the president,” he stated.
He stressed that it will not be cheery news for MDAs to come for their 2025 budget defense with record of non-performance of their core mandates as contained in capital budget stressing that within the period of the 2024 budget still running, effort should be made by Finance Ministry to release funds for capital projects.
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Rep. Bichi echoed Olamilekan‘s sentiments, emphasising that investments in critical infrastructure, such as schools, hospitals, roads, and energy, are essential for improving the quality of life for the majority of Nigerians. Bichi noted that while recurrent expenditure, particularly on debt servicing, is necessary, it only affects a small fraction of the population around 10 percent.
He said, “Most of the items of recurrent expenditure which takes a huge part of our budget and is implemented 100 percent will only directly affect about 10 percent of our population while capital projects of the MDAs will directly affect majority of over 200 million Nigerians in areas of social infrastructures provisions like hospitals, schools, roads, energy and similar.”
Minister Edun acknowledged that while capital releases are pending, Nigeria’s fiscal constraints make it difficult to meet all funding needs. He cautioned, however, that the government must avoid past mistakes of overspending without sufficient revenue, as seen in other countries. He confirmed that there are pending warrants awaiting payment for capital projects, but funding remains a key challenge.
