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Nigeria’s capital expenditure (CAPEX) for the first half of 2024 dropped by 25.3% to N1.99 trillion, down from N2.68 trillion in the corresponding period of the previous year, according to data from the Central Bank of Nigeria (CBN). This reduction in CAPEX occurred even as the government operated four budgets simultaneously.
Analysis of CBN’s statistical bulletin reveals a shift in spending priorities toward recurrent costs and debt servicing, sparking concerns about the long-term impact on infrastructure development and economic growth. CAPEX allocation for January 2024 was notably absent, in contrast to N379.1 billion in January 2023, suggesting a slow start to the fiscal year.
Spending peaked in February 2024 at N893.9 billion, a 36.3% increase compared to N656.3 billion in February 2023. However, this upward trend was short-lived, as CAPEX sharply dropped by 65% to N258.6 billion in March 2024, a significant decline from the N763.6 billion spent in March 2023.
April 2024 witnessed another dip, with capital spending falling to N42.1 billion, down from N64.5 billion in April 2023. Though May and June 2024 saw some recovery, with CAPEX rising to N478.9 billion and N325.4 billion, respectively, these figures remained below their 2023 counterparts, highlighting a consistent downward trajectory.
This inconsistent spending pattern reflects growing fiscal constraints, with capital expenditure accounting for only 53.35% of the N3.73 trillion retained revenue in the first half of 2024, a decline from 96.06% in the first half of 2023. The shift away from infrastructure investment poses risks to economic recovery, job creation, and overall development.
At the same time, total government expenditure surged by 29.5%, rising from N9.39 trillion in H1 2023 to N12.17 trillion in H1 2024, largely driven by recurrent costs. Recurrent spending increased by 51.4% to N10.17 trillion, with debt servicing alone accounting for N6.04 trillion, a 68.8% increase from N3.58 trillion in the same period last year. Personnel costs also grew by 17.6%, further limiting available funds for capital projects.
As a result, the fiscal deficit expanded by 28%, rising from N6.59 trillion in H1 2023 to N8.44 trillion in H1 2024. This widening deficit raises concerns over fiscal sustainability, as debt repayments and administrative costs continue to overshadow growth-oriented investments.
During the 30th Nigerian Economic Summit, Minister of Budget and Economic Planning, Abubakar Bagudu, reaffirmed the government’s commitment to restoring economic stability through the implementation of three distinct budgets: the 2024 annual budget, a supplementary budget, and an amendment to the 2024 budget that includes the Renewed Hope Infrastructure Fund. Bagudu emphasized the government’s focus on national priorities, including agriculture, food security, infrastructure, human capital development, and security.
He highlighted innovative initiatives such as expanding consumer credit, reforming mortgage access, launching a student loan scheme, and advancing the CNG energy transition program. However, the minister’s optimistic outlook contrasts with data indicating a decline in capital spending.
The civic-tech organisation BudgIT has criticized the Federal Government’s concurrent operation of four national budgets, labeling it as unsustainable. With the lifespan of the capital component of the 2023 budget extended, and a supplementary budget added, the total national budget for 2024 now stands at N35.06 trillion. Of this, N13.77 trillion is earmarked for capital expenditure, yet only 19.46% of this allocation has been utilized in the first six months of the year.
BudgIT’s country director, Gabriel Okeowo, expressed concern over the reduced focus on infrastructure development, warning that the persistent decline in capital expenditure may undermine efforts to achieve sustainable economic recovery.
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