Federal MDAs face N15tn funding gap despite rising revenues
Federal Government ministries, departments, and agencies (MDAs) have faced persistent underfunding for capital projects over the past three fiscal years. Despite increases in capital budgets, actual releases and spending have lagged behind, largely due to rising debt service obligations. The resulting shortfall has delayed or stalled numerous infrastructure and development projects. Bola Tinubu and other officials have acknowledged the funding crisis and are taking steps to address outstanding payments and improve budget execution.
TLDR
- Over the last three fiscal years, MDAs’ capital expenditure votes were underfunded by a cumulative N15.21tn, despite higher budget allocations.
- In 2023, MDAs received N3.25tn out of a budgeted N5.31tn for capital expenditure, while in 2024, they got N5.81tn out of N11.21tn, and in the first seven months of 2025, only N834.80bn out of a pro rata N10.81tn.
- Debt service consumed a significant portion of government revenue, with about 83.15 per cent of retained revenue in 2023 and 63.54 per cent in 2024 spent on servicing debt.
- Contractors protested at the Ministry of Finance over unpaid funds for projects executed in 2024, demanding the release of N760bn and claiming the government owes about N4tn.
- The Federal Government has promised to clear outstanding payments to contractors and is considering extending the 2025 budget into 2026 to address delays and improve capital project implementation.
