FG Directs 70% Rollover of 2025 Capital Budget to 2026 Amid Revenue Constraints

FG Directs 70% Rollover of 2025 Capital Budget

The Federal Government has directed ministries, departments and agencies (MDAs) to carry over 70% of their approved 2025 capital budget into the 2026 fiscal year, in a move aimed at prioritising the completion of ongoing projects and managing fiscal pressures amid tight revenue conditions.

In a circular issued by the Budget Ministry and circulated to senior government officials, MDAs were instructed that their 2026 budget proposals must largely be composed of funds already allocated in 2025. New capital projects are not permitted under this directive.

The measure reflects the government’s emphasis on continuity and resource discipline, aligning capital expenditure with the priorities defined in the 2026–2028 Medium‑Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP): security, infrastructure, health, education, agriculture, power, social safety nets and economic stabilisation.

Under the new framework

• Only 30% of 2025 capital allocations will be progressively disbursed this year; the remaining 70% forms the core of the 2026 capital budget.

• Overhead (recurrent) budgets must remain within 2025 ceilings, despite inflationary pressures.

Government argues this will avoid duplication, reduce wasteful spending, and ensure value-for-money given constrained revenues.

Expert Reactions: Mixed Views on Fiscal Prudence vs. Potential Delay

The decision has drawn both support and criticism from economists and stakeholders.

• Critique on Fiscal Discipline: Some experts say the rollover signals deeper problems. Aliyu Ilias of CSA Advisory argued the move reflects “poor fiscal discipline,” and lamented that many capital projects that could have delivered public benefit are now stalled. He described the delay as “an announced suffering.”

• Concerns over Governance & Oversight: Critics also warn the rollover may foster opacity and reduce accountability. With funds carried over en masse, tracking implementation and value-for-money becomes more difficult, potentially creating room for mismanagement.

• Support for Rational Budgeting: On the other hand, Muda Yusuf of the Centre for the Promotion of Private Enterprise defended the decision as pragmatic. He argued that approving new capital allocations while previous ones remain unimplemented undermines fiscal credibility. The rollover, he said, helps “normalise” the budgeting process.

• Structural Concerns about Budget Timing: Some observers including Nigerian Economic Society president Adeola Adenikinju and senior Economist Sheriffdeen Tella cautioned that rolling over projects might further destabilise Nigeria’s budget cycle, which has already drifted from the January–December fiscal framework. They warned that the approach risks institutionalising uncertainty and disrupting long-term planning

Strategic Implications for Investors, Infrastructure & Governance

For infrastructure projects: The rollover could lead to delays in completion of critical capital projects from roads and power works to social infrastructure slowing down expected gains in connectivity, service delivery, and economic stimulus.

For investors: While the move shows fiscal caution, it may dampen investor confidence if capital-intensive public investments are delayed particularly those that underpin private-sector growth (e.g. infrastructure, energy, transport).

For governance: The success of the rollover rests heavily on transparent implementation, adherence to the revised budget ceilings, and strong oversight by both the executive and legislature. Without these, the policy risks becoming a formal mechanism for deferring commitments indefinitely.

Conclusion

The Federal Government’s decision to defer 70% of its 2025 capital projects into 2026 reflects the administration’s attempt to manage stretched fiscal space while preserving continuity in key infrastructure and development agendas. The policy presents a double-edged sword: while it may bring order and fiscal prudence, it could also stall vital capital projects and erode confidence among stakeholders if not managed transparently. For Nigeria to avoid a growing infrastructure backlog and deliver on development promises, the rollover must be accompanied by strict oversight, realistic revenue assumptions, and timely project execution.