Governors across Nigeria have earmarked N17.51tn for capital projects in their 2025 budgets, signaling a significant push to address infrastructure deficits.
The PUNCH reported this marks a 54.39 per cent increase from the N11.34tn allocated in 2024, despite states struggling to fully fund previous commitments.
However, securing adequate funds has proven challenging. In 2024, states collectively faced a N3.98tn deficit, limiting their ability to execute infrastructure projects effectively.
Over the two-year period, N28.85tn has been planned for capital development, buoyed by increased revenue allocations from the Federation Account Allocation Committee.
FAAC disbursed N15.12tn to federal, state, and local governments in 2024, reflecting a 49.24 per cent increase from N10.143tn in 2023. Of this, state governments received the largest share, N5.22tn, accounting for 34.5 per cent of the total.
Despite this financial boost, many states still fall short in delivering essential infrastructure projects, leading to delays in critical sectors like roads, healthcare, and education.
A review of 32 states’ 2024 budget implementation reports and 35 states’ approved 2025 budgets reveals a trend of shifting priorities towards recurrent expenditures and debt servicing, raising concerns about long-term economic development.
Capital expenditure represents long-term investments in roads, bridges, schools, hospitals, and public transport systems, which are crucial for economic growth and improved public services.
In 2024, only nine states—Delta, Ekiti, Edo, Lagos, Rivers, Yobe, Osun, Bauchi, and Akwa Ibom, achieved over 80 per cent implementation of their budgeted capital projects.
Fifteen states reached implementation rates of 50 to 76 per cent, while eight states fell below 50 per cent.
Some of the leading states in terms of capital spending include:
Lagos State: Budgeted N1.53tn for capital projects and successfully spent N1.31tn, achieving an 85.5 per cent implementation rate.
Abia State: Proposed N474.29bn for infrastructure but only managed to spend N250.47bn (52.8 per cent implementation).
Akwa Ibom: Budgeted N573.32bn, spent N483.88bn, achieving an 84.4 per cent implementation rate.
Adamawa State: Planned N146.39bn in capital projects but executed N109.99bn, reflecting a 75.2 per cent implementation rate.
Looking ahead, 35 state governors have outlined plans to allocate at least N17.51tn for infrastructure in 2025. Some of the biggest capital budgets include:
Lagos State: N2.07tn
Abia State: N611.67bn
Akwa Ibom: N655bn
Adamawa: N348.96bn
Anambra: N467bn
Bauchi: N284.02bn
Bayelsa: N433.26bn
Delta: N630.46bn
While these figures reflect ambitious infrastructure plans, experts caution that states may struggle to execute these projects on time due to financial constraints and funding gaps.
The report highlights major financial hurdles for Nigerian states, noting that:
Internally Generated Revenue growth remains weak due to economic challenges and inefficiencies in tax collection.
Most states rely heavily on FAAC transfers, with Lagos being a rare exception due to its strong IGR base.
Rising recurrent expenditure—driven by high inflation and increased minimum wage—is straining state finances.
States depend on subsidized federal loans to finance infrastructure, but many fail to execute their full capital budgets, with only about 60 per cent of budgeted capital expenditure typically implemented.
As 2025 progresses, all eyes will be on state governments to see whether they can bridge the infrastructure gap and fulfill their ambitious budgetary commitments.
