Nigeria's capital expenditure for the first half of 2024 has decreased by 25.3 percent, totaling N1.99 trillion, down from N2.68 trillion during the same period last year. This reduction is notable despite the government managing four budgets simultaneously.

Data from the Central Bank of Nigeria's statistical bulletin indicates a shift in focus towards recurrent expenditures and debt servicing, raising concerns about the potential long-term effects on economic growth.

A month-by-month analysis reveals erratic spending trends in 2024. Capital expenditure started at zero in January 2024, contrasting with N379.1 billion in January 2023, indicating a slow commencement to the fiscal year.

February 2024 saw a peak in spending at N893.9 billion, a substantial increase from January, yet only 36.3 percent higher than February 2023's N656.3 billion. However, March 2024 experienced a sharp decline in capital expenditure to N258.6 billion, reflecting a 65 percent drop from February and a 66.1 percent decrease compared to March 2023's N763.6 billion.

In April 2024, capital spending fell to N42.1 billion, a 36 percent reduction from the N64.5 billion allocated in April 2023. The months of May and June 2024 showed some improvement, with capital expenditure rising to N478.9 billion and N325.4 billion, respectively.

Nevertheless, these amounts remained lower than the corresponding figures from 2023, which were N300 billion and N513.3 billion, indicating a persistent downward trend.

The irregular monthly spending patterns highlight increasing fiscal pressures as the government faces rising debt and recurrent costs.

Capital expenditure accounted for approximately 53.35 percent of the N3.73 trillion retained revenue in the first half of 2024, a significant decline from the 96.06 percent share in the same period of 2023. This reduction suggests a diminished emphasis on infrastructure investment, which could hinder economic growth and job creation.

In contrast, total government expenditure increased by 29.5 percent, rising from N9.39 trillion in the first half of 2023 to N12.17 trillion in the first half of 2024, primarily driven by recurrent spending.

Recurrent expenditure experienced a significant increase of 51.4 percent, rising to N10.17 trillion in the first half of 2024, up from N6.72 trillion in the same period of 2023. Of this total, 68.2 percent was dedicated to debt servicing, which surged by 68.8 percent to N6.04 trillion, compared to N3.58 trillion the previous year. Personnel expenses also saw a rise of 17.6 percent, reaching N2.32 trillion, further constraining the funds available for capital projects.

The growing disparity between revenue and expenditure led to a 28 percent increase in the fiscal deficit, which expanded from N6.59 trillion in the first half of 2023 to N8.44 trillion in the first half of 2024.

This escalating deficit raises concerns regarding fiscal sustainability, as an increasing share of resources is allocated to debt repayment and administrative expenses, leaving less available for investments aimed at fostering growth.

The 25.3 percent reduction in capital expenditure, despite the overall rise in spending, indicates a declining ability to finance critical infrastructure projects, potentially hindering economic recovery. During the 30th Nigerian Economic Summit on Monday, Abubakar Bagudu, the Minister of Budget and Economic Planning, reaffirmed the government's dedication to restoring economic stability through the implementation of three separate budgets.

The minister underscored the significance of a N2.17 trillion supplementary budget, the 2024 annual budget, and an amendment to the 2024 budget that includes the Renewed Hope Infrastructure Fund.

He elaborated that these budgets reflect the government's commitment to addressing essential national priorities such as agriculture and food security, infrastructure, human capital development, security, social investment, and the creative economy.

Additionally, he outlined innovative strategies, including the expansion of consumer credit to bolster manufacturing, reforms in mortgage accessibility, the introduction of a student loan program, and the promotion of the CNG energy transition initiative.

Bagudu emphasized that the implementation of these various budgets is a key component of a larger strategy aimed at decreasing the fiscal deficit and increasing capital expenditure. This approach ensures that the government can finance essential projects while upholding fiscal discipline.

He said, “Between last year’s summit and today, we have had a N2.17tn Supplementary Budget, a 2024 annual budget, and an amendment to the 2024 budget, which incorporated the Renewed Hope Infrastructure Fund into the budget.

“The three budgets demonstrate our commitment to restoring economic stability and funding our priorities: agriculture and food security, infrastructure, human capital development, security and social investment, and innovation and creative economy. Innovative measures include expansion.”

Data indicates that government expenditure on capital projects has decreased this year. The minister also highlighted the government's dedication to enhancing access to affordable credit, fostering collaboration with the private sector, and promoting investment in infrastructure, agriculture, and digital industries.

He emphasized the importance of ongoing cooperation between public and private entities to achieve sustainable economic growth and enhance global competitiveness.

BudgIT, a prominent civic-tech organization in Africa, has criticized the Federal Government's plan to execute four national budgets simultaneously.

Currently, the 2024 budget is in effect, while the Senate and House of Representatives have extended the capital component of the 2023 Appreciation Act and the supplementary budget for 2023.

Additionally, President Bola Tinubu has presented the 2024 supplementary budget to the National Assembly, resulting in a total of four national budgets for the 2024 fiscal year.

Following the approval of the expanded 2024 budget, which totals N35.06 trillion, the allocation includes N1.74 trillion for statutory transfers, N8.27 trillion for debt servicing, N11.2 trillion for recurrent expenses, and N13.77 trillion designated for the Development Fund for capital expenditures for the year ending December 31, 2024.

This indicates that the government utilized only approximately 19.46 percent of its capital expenditure budget during the first half of this year.

In a statement from BudgIT's country director, Gabriel Okeowo, the organization expressed concern over the current situation.

Despite criticism from various stakeholders, including opposition parties regarding the necessity of managing four concurrent budgets, Presidential Spokesman Bayo Onanuga stated in an interview with The PUNCH that the budget cycle was extended to December to prevent the abandonment of capital projects outlined in the appropriations.