Nigeria’s capital expenditure dropped by 25.3% in the first half of 2024, amounting to N1.99 trillion, down from N2.68 trillion in the same period last year, according to data from the Central Bank of Nigeria (CBN). This decrease comes despite the federal government running four budgets simultaneously, signaling growing fiscal pressures.
The CBN’s statistical bulletin highlights a shift in spending priorities toward recurrent expenditures and debt servicing, raising concerns about the country’s long-term economic growth. In the first six months of 2024, capital spending started sluggishly, with no allocation in January compared to N379.1 billion in the same month of 2023. Although it surged to N893.9 billion in February, it still reflected only a 36.3% increase from the prior year.
March 2024 saw a steep 65% decline in capital expenditure, amounting to just N258.6 billion, a significant drop from the N763.6 billion spent in March 2023. Similarly, spending in April fell to N42.1 billion, a 36% decrease from April 2023’s figures. Although there was some recovery in May and June, capital allocations remained lower than the previous year.
This trend underscores the growing fiscal challenges facing the government as it grapples with rising debt obligations and increasing recurrent expenditures. Recurrent spending surged by 51.4% in H1 2024, reaching N10.17 trillion, with 68.2% allocated to debt servicing, which skyrocketed by 68.8% to N6.04 trillion.
Despite an overall 29.5% increase in government spending to N12.17 trillion, the reduced focus on infrastructure projects raises concerns over Nigeria’s ability to drive economic recovery and job creation. The fiscal deficit also expanded by 28%, from N6.59 trillion in H1 2023 to N8.44 trillion in H1 2024, further straining the country’s fiscal sustainability.
During the 30th Nigerian Economic Summit, Minister of Budget and Economic Planning, Abubakar Bagudu, emphasized the government’s commitment to restoring economic stability through three distinct budgets—the 2024 annual budget, a supplementary budget, and an amended budget with the Renewed Hope Infrastructure Fund. These measures are aimed at addressing critical sectors like agriculture, infrastructure, human capital, and security.
While the government remains focused on reducing the fiscal deficit and enhancing capital expenditure, current data reveals a concerning trend of reduced investment in essential infrastructure projects, which could hamper long-term economic growth.
