State capital spending drops as political activity rises
The capital expenditure of 26 Nigerian states has seen a significant decline, with many states slashing budgets for infrastructure and development projects. Analysts attribute the drop to intensifying political activities and growing fiscal pressures. Only Oyo state bucked the trend by increasing its capital spending, while most others posted sharp declines. The shift raises concerns about the impact on infrastructure, job creation, and economic growth across the country.
What we know
- Capital expenditure by 26 state governments fell by N2.19tn within three months in the first quarter of 2026, dropping from N3.79tn in the fourth quarter of 2025 to N1.59tn.
- Oyo was the only state to significantly increase capital spending, rising from N105.35bn in the fourth quarter of 2025 to N231.27bn in the first quarter of 2026.
- States like Lagos, Akwa Ibom, Bayelsa, and Enugu recorded some of the largest declines in capital expenditure during the period.
- Thirteen of the 26 states reported new borrowings in the first quarter of 2026, with Oyo accounting for nearly half of the total loans at N164.88bn.
- Analysts warn that the reduction in capital spending could slow infrastructure development and economic growth, while rising debt may threaten fiscal stability.
