FG defers 70% of 2025 capital projects to 2026

FG Orders 70% of 2025 Capital Budget Rolled Over to 2026 Amid Fiscal Challenges

The Federal Government has directed all ministries, departments, and agencies (MDAs) to carry over 70 per cent of their 2025 capital budget into the 2026 fiscal year. The decision aims to prioritise the completion of existing projects and manage spending pressures amid declining revenues, according to the 2026 Abridged Budget Call Circular issued by the Federal Ministry of Budget and Economic Planning.

The circular, circulated to ministers, service chiefs, and heads of agencies, explicitly states that the preparation of the 2026 budget will not allow the introduction of new capital projects. MDAs are required to upload 70 per cent of their 2025 allocations to align with the government’s immediate development priorities, including national security, education, health, infrastructure, power, agriculture, and social safety nets.

Rationale Behind the Carryover

The government explained that the rollover is intended to ensure continuity for ongoing projects and reduce wasteful duplication. Only 30 per cent of the 2025 capital budget will be released within the current fiscal year, while the remaining 70 per cent forms the basis of the 2026 budget. Ministries are also instructed not to exceed their 2025 overhead ceilings despite inflationary pressures, citing revenue constraints.

Budget preparations must align with the 2026–2028 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF-FSP), reflecting the Renewed Hope Agenda, including the Renewed Hope Infrastructure Development Plan, Ward Development Plan, and National Development Plan. MDAs and government-owned enterprises are required to submit their budgets online via GIFMIS and the Budget Information Management and Monitoring System, respectively, by December 9, 2025.

Financial Framework for 2026

The 2026 budget outlines tighter revenue projections amid rising debt service obligations. Key figures include:

Total available budget for the Federal Government and GOEs: ₦54.46tn (down from ₦54.99tn in 2025)
Statutory transfers: ₦3.15tn (down from ₦3.64tn)
Recurrent non-debt expenditure: ₦15.26tn
Debt service: ₦15.52tn (up from ₦13.94tn)
Aggregate capital expenditure: ₦22.37tn (down from ₦26.19tn)
MDA capital expenditure: ₦8.67tn (down from ₦12.39tn)
Project-tied loans: ₦2.05tn (down from ₦3.36tn)
Budget deficit: ₦20.12tn (up from ₦14.10tn)

Economists React

Reactions to the carryover directive have been mixed. Dr. Aliyu Ilias, CEO of CSA Advisory, criticised the decision, arguing that it reflected poor fiscal discipline and stalled projects that Nigerians were expecting. He warned that the rollover could create gaps for abuse and corruption due to weak oversight.

Conversely, Dr. Muda Yusuf, Director of the Centre for the Promotion of Private Enterprise, defended the move, saying it was necessary to restore credibility to the budget process. He highlighted that rolling over unfinished projects ensures that expenditure and revenue plans are realistic and helps normalise the system, which has been plagued by delayed implementation and unrealistic projections.

Government Perspective

Minister of Budget and Economic Planning, Senator Abubakar Bagudu, emphasised that the 2026 budget cycle will support Nigeria’s $1tn economy target. The focus will be on ward-based development, infrastructure, security, and boosting domestic production. Bagudu noted that aligning expenditure with revenue projections under the MTEF-FSP will strengthen economic planning and enhance fiscal discipline.

As Nigeria prepares for the 2026 fiscal year, the government aims to ensure continuity in capital projects while addressing fiscal realities, maintaining oversight, and enhancing value for money.

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FG defers 70% of 2025 capital projects to 2026