Tinubu’s administration biggest spender on infrastructure in 25 years
Orisemeke Benjamin
The Independent Media and Policy Initiative (IMPI) says that no administration aside from that of President Bola Tinubu has spent up to $8 billion on capital expenditure in any year since 1999.
In a policy statement signed by its Chairman Dr Omoniyi Akinsiju, the think tank argued that the low spending on capital projects had over the years widened Nigeria’s infrastructure deficit to the extent that it needs a minimum annual spend of $14 billion for ten years to bridge the gap.
“Over the last 25 years, since 2000, no federal administration has budgeted more than $14 billion for capital spending in a single year, despite three oil booms between 2000 and 2014.
“In 2000, for instance, total federal government projected capital expenditure was $3.62 billion, but only the first quarter was fully disbursed, with lower disbursements recorded in the second quarter to the last. Though the 2001 fiscal year was marked by high oil revenues and windfall gains (excess proceeds), the capital budget was $3.87 billion, but only the first-quarter allocation was fully disbursed.
“In 2002, the total capital expenditure appropriated was $2.7 billion. Still, only about 38% of the capital budget was implemented, with appropriated capital expenditure declining to $2.25 billion in 2003 and recording a marginal increase to $2.6 billion in 2004.
“Though capital spending increased to $ 4.6 billion in 2005, it was still a far cry from KPMG’s $14.2 billion suggested benchmark per annum, especially given that it marked the year of the oil windfall, when projected crude oil sales reached $37.7 billion. But only 55% of the budget was implemented by December, 2005. The trend of low capital appropriation continued in 2006, with total federal infrastructure spending cited at $4.5 billion.
“In 2007, however, the capital budget ballooned to over $5 billion, propelled by an oil sale boom, but actual spending was about $3.9 billion. The same basic, relatively high capital budget appropriation was recorded in 2008, another oil price surge year, when about $6.7 billion was appropriated, with yet again a low implementation threshold. In 2009, approximately $7 billion was budgeted for capital expenditure, but only about 54.26% was released.
“In tandem with the oil boom of 2010, 2011, 2012, and 2013, appropriated capital expenditure increased to about $12.3 billion, $10.42 billion, $8.2 billion, and $9.9 billion, respectively. However, all the appropriated expenditures were reported to have performed below 70 per cent.
“We note that, beginning in 2014, after the global oil price upswing, capital expenditure returned to the $6 billion range. By 2015, however, earnings from crude oil had crashed, and that reflected in a reduced capital budget allocation of about $3.2 billion.
“Nevertheless, as of September 2015, only about $1 billion had been spent on capital projects. In 2016, there was a relative increase in both allocation and implementation, with about $3.95 billion released for capital projects.
“Paradoxically, the year of the oil crash recorded the highest capital release for infrastructure in the country’s history up to that point. The budget was successfully implemented through loans and related debts.
“About $2 billion was specifically injected to revive abandoned projects in the year. In 2017, proposed capital expenditure was roughly $7.3 billion; however, about $4.5 billion was released. In 2018, capital expenditure was quite ambitious at about $9.42 billion, again with about $4.4 billion released.
“This was replicated in 2019 when total capital expenditure released was roughly $3.9 billion out of the approved capital budget of $6.6 billion. In 2020, budgeted capital expenditure was about $5.0 billion,” it said.
The policy group added that there was an improvement in the Buhari years up until President Tinubu assumed office as a result of a resort to borrowing to fund infrastructural development
“In 2021, planned capital expenditure totalled roughly $10.4 billion. However, the actual spending was about $5 billion. Beginning with the 2022 capital budget allocation, we observed an exponential increase in the capital budget to $13.34 billion; however, only about $4.29 billion was released.
“The value of capital expenditure declined to $9.3 billion in 2023, while actual performance was reported at $3.45 billion. Beginning in 2024, we observed a policy of rolling over outstanding appropriated expenditures into the following year to ensure their complete implementation.
“The 2024 capital expenditure was printed at about $13 billion, with a further increase to about $15 billion in the 2025 budget for restoration.
“We note at this juncture the near-perennial low budget implementation threshold since 2000, with the obvious inconsequentiality of appropriated expenditure on infrastructural development.
“However, at this time, we acknowledge the record-breaking fiscal milestone set by the President Tinubu-led federal administration, which matched and exceeded KPMG’s $14.2 billion annual infrastructure spending estimate for the first time in Nigeria,” IMPI noted.
This according to the policy group is why the administration’s debt-for-infrastructure policy is the best approach to stimulate the economy, expand the country’s productive capacity and attract long-term foreign investors.
“Based on the approved 2026 Appropriation Act, the Nigerian government significantly expanded its fiscal framework, with the total budget breaking records. Remarkably, the budget allocated $23 billion (roughly half the total budget) to infrastructure and other capital expenditures.
“Without doubt, the 2026 budget is indicative of a new vista in the nation’s fiscal firmament with emphasis on securing debts for infrastructure development,” it surmised.
