State governors have unveiled ambitious plans to significantly increase capital expenditure, aiming to address the pressing infrastructure deficit across states. For the 2025 budgets, governors have earmarked a substantial N17.51 trillion to fund vital capital projects.
In 2024, N11.34 trillion was allocated for similar initiatives; however, insufficient funding led to a shortfall of N3.98 trillion. The current two-year strategy reveals plans to spend an estimated N28.85 trillion on infrastructure upgrades, fueled by enhanced revenue allocations from the Federal Government.
Notably, allocations from the Federation Account Allocation Committee to various government tiers rose by N4.994 trillion, reaching a total of N15.12 trillion within the year. This marks a significant increase of 49.24 percent compared to N10.143 trillion allocated in 2023.
An analysis of monthly communiques indicates that state governments received the highest allocation, totaling N5.22 trillion, which represents 34.5 percent of the overall distribution among all government tiers. Despite this financial boon, states still face challenges in fulfilling their commitment to infrastructure development, leading to delays in crucial projects aimed at improving sectors like transportation, healthcare, and education.
A review of budget implementation reports for 32 states and the approved budgets for 35 states highlights ongoing challenges. Findings suggest a shift towards recurrent costs and debt servicing, raising alarms about potential long-term impacts on economic growth.
Experts emphasize the importance of capital spending, which directly supports long-term investments aimed at improving infrastructure, public services, and overall economic health. Projects funded through these expenditures are crucial for building roads, schools, hospitals, and vital public transportation systems.
The data shows impressive performance from specific states; nine—including Delta, Ekiti, Edo, Lagos, Rivers, Yobe, Osun, Bauchi, and Akwa-Ibom—boasted an implementation rate exceeding 80 percent. Meanwhile, 15 states achieved between 50 to 76 percent of their intended expenditure, with eight states falling below 50 percent.
Despite financial hurdles, states like Lagos, Niger, and Enugu have emerged as leaders in capital expenditure allocation. Lagos, for instance, proposed the highest capital expenditure at N1.53 trillion, achieving an impressive implementation rate of 85.5 percent, while Abia State could only execute 52.8 percent of its proposed spending.
As 35 state governors plan to allocate at least N17.51 trillion to enhance infrastructure, marking a 54.39 percent increase from the previous year, concerns linger over their ability to complete these projects effectively amid existing deficits.
State-by-state estimations reveal plans for significant capital investment in 2025, with Abia targeting N611.67 billion, Akwa Ibom increasing its projection to N655 billion, and Lagos aiming for N2.07 trillion for infrastructure development.
The challenges facing Nigerian states, including low internally generated revenue and high inflation, continue to impede effective capital project execution. Many states remain reliant on Federal Government support to meet their funding needs, with an average of only about 60 percent of capital expenditures being fulfilled.
As we move into 2025, stakeholders and citizens alike will be closely monitoring these developments, hoping for successful implementation of projects that will address the critical infrastructure needs of the nation.
