An in-depth review of Nigeria’s proposed 2026 budget has revealed that new projects valued at more than N3.5 trillion have been incorporated, a move that appears to contradict prior budget guidelines aimed at curbing the initiation of fresh capital projects. This figure emerged from the recently released 2026 Appropriation Bill, highlighting the tension between budget discipline and the expansion of government capital programs.
Budget Guidelines and the Directive to Roll Over Existing Projects
In December 2025, the Federal Ministry of Budget and Economic Planning issued the 2026 Abridged Budget Call Circular to all key government stakeholders, including ministers, service chiefs, and heads of agencies. The circular explicitly directed Ministries, Departments, and Agencies (MDAs) to carry forward at least 70 percent of their 2025 capital allocations into the 2026 fiscal year. This directive was grounded in the administration’s objective to prioritize the completion of ongoing projects over the launch of new ones. It was also a strategic response to constrained revenue inflows and the pressing need to control government spending.
The circular emphasized that any rollover or capital expenditure must align with the immediate developmental priorities of the country and the government’s policy focus areas. These priority sectors include national security, the economy, education, health, agriculture, infrastructure, power and energy, as well as social safety nets and empowerment programs targeted at women and youth.
Moreover, the directive insisted that ministries and agencies refrain from proposing fresh capital projects unless they directly support these core priorities and demonstrate value for money. Expenditures were to be subjected to stringent scrutiny to ensure only essential spending was approved.
The Reality: Significant Injection of New Capital Projects
Contrary to the explicit instructions, the analysis of the 2026 budget proposal uncovers a considerable number of new capital projects introduced across MDAs. Data extracted from the Appropriation Bill indicates that 82 MDAs have incorporated at least one new capital or program item. Collectively, these new project lines exceed 400, encompassing a wide spectrum of initiatives—from large-scale infrastructure and healthcare investments to smaller constituency-focused projects such as borehole drilling, training programs, and equipment procurement.
The total value of these new projects at the MDA level alone stands at approximately N844.49 billion. However, when the Service Wide Votes (SWV) are included, the total fresh capital expenditure swells to an estimated N3.5 trillion. This amount represents roughly 15.09 percent of the overall proposed capital budget for 2026, which totals about N23.21 trillion.
Understanding Service Wide Votes and Their Impact
A substantial portion of the new capital projects is found within the Service Wide Votes, which represent budget lines outside the conventional ministerial capital appropriations. These allocations, totaling N2.66 trillion, highlight the government’s focus on programs and liabilities that cut across multiple agencies and sectors. The SWV’s new project portfolio is primarily geared toward financing government-wide initiatives, security provisions, and settlement of outstanding obligations.
Notably, the largest single item in this category is the N1.7 trillion provision for contractors’ outstanding liabilities from 2024. This single allocation alone accounts for nearly 48.55 percent of all new project funding, including SWVs. The bill also earmarks N300 billion for three separate funds under SWV: the Nigeria Development Finance Corporation, the Economic Transformation Finance Programme, and the Nigeria Growth Investment Fund, each allocated N100 billion.
Other significant SWV allocations include a N20 billion capital injection for INFRACO, N30 billion for special operations by the Department of State Services, and N110.31 billion designated for the Nigerian Air Force to address outstanding payments related to helicopter acquisitions. Additionally, the budget provides N283.85 billion for the presidential air fleet’s logistics and management, which encompasses the operation of the National Forest Guard.
Further recurrent and capital grants are allocated to support new MDAs—N41.12 billion as a recurrent take-off grant and N19.50 billion as capital grants mainly for health and education institutions. The SWV also accounts for pension adjustments and gratuity payments to civil servants.
Leading MDAs with Large New Project Allocations
At the MDA level, the Budget Office of the Federation emerges as the highest recipient of new project funds, with a significant N375 billion allocated for a multilateral or bilateral tied loan linked to the Power Sector Recovery Operation’s additional financing. This single line item alone represents about 44.41 percent of the new project funding earmarked for MDAs and over 10 percent of the total new projects including SWVs.
Following the Budget Office, the Federal Ministry of Transport headquarters has been assigned N210.53 billion for new capital projects. These include N68.5 billion for consultancy services related to the Lekki-Ijebu Ode-Ore-Kajola railway and coastal railway developments, as well as N142.03 billion for constructing six bus terminals and transportation facilities across the six geopolitical zones. Collectively, these projects constitute nearly 25 percent of the MDA new project total and 6 percent of the overall new capital budget.
The National Library of Nigeria features prominently with N24 billion earmarked for structural renovations and spatial upgrades across the six geopolitical zones. This is the third-largest MDA allocation for new projects, comprising almost 3 percent of the MDA new project total.
Meanwhile, the National Blood Service Commission is allocated N15 billion to build and equip a national blood service center and establish a strategic blood reserve in Abuja, along with funds for rehabilitating state offices. This allocation accounts for about 1.78 percent of the new project funding at the MDA level.
The Sokoto Rima River Basin Development Authority also received funding of about N9.14 billion for various rural development projects, including the construction of solar mini-grids, solar-powered streetlights for security, rural roads, irrigation water pumps, and youth empowerment initiatives. These projects represent roughly 1.08 percent of MDA new project funding.
Other Notable Allocations and Sectoral Focus
Beyond the top five MDAs, numerous health and social institutions have new project provisions ranging from N5 billion to N6.22 billion. Several teaching hospitals and medical centers also received budgetary allocations for new capital ventures.
New project funding for vehicle purchases totals approximately N5.85 billion, led by allocations such as N1.5 billion for vehicles at the Federal University of Technology, Iyin Ekiti, N600 million at the Federal University of Agriculture, Dutsin-Ma, and N500 million at the Jos University Teaching Hospital.
Furnishing and office equipment procurements account for N2.93 billion, including allocations of N1.18 billion for medical complexes at the Nnamdi Azikiwe University Teaching Hospital (NAUTH) in Nnewi, N435 million at the Air Power Centre of Excellence, and N250 million for a zonal office of the Pharmacy Council.
Renovation and refurbishment works collectively account for N29.88 billion, dominated by the National Library upgrade and the blood service office renovations.
Residential and staff accommodation projects have been budgeted at N25.29 billion, with major sums allocated for the Defence Headquarters facilities and Department of State Services housing projects.
Historical Context and Recurring Budgetary Issues
This is not the first occasion on which the Nigerian Federal Government has attempted to restrain the introduction of new projects in its national budget. In December 2024, the government issued a directive barring MDAs from proposing new capital projects in the 2025 budget unless these projects were directly related to the completion of ongoing initiatives. This was explicitly stated in the 2024 Federal Government Budget Call Circular, which underscored the administration’s intention to focus on wrapping up existing projects to promote fiscal prudence.
The circular further mandated MDAs to rigorously scrutinize and justify their proposals to ensure alignment with national priorities such as security, economic development, education, health, agriculture, infrastructure, power, and social safety nets focused on vulnerable groups like women and youth.
Yet, despite these directives, budget reviews repeatedly reveal the presence of new projects introduced without apparent stringent oversight. This raises questions about the effectiveness of the Budget Office of the Federation and the National Assembly in enforcing budget discipline.
Expert Opinions on Budget Process Challenges
Professor Adeola Adenikinju, President of the Nigerian Economic Society, has criticized the late submission and approval of budgets, arguing that the National Assembly is deprived of adequate time to thoroughly scrutinize budget proposals. He stressed that this rush undermines fiscal predictability and weakens oversight mechanisms. Adenikinju emphasized the importance of timely budget presentations to enable thorough consultations and informed decision-making.
Similarly, Dr. Aliyu Ilias, a development economist and CEO of CSA Advisory, pointed to systemic fiscal discipline problems within the government. He contended that the recurring lapses might be intentional and lamented the National Assembly’s failure to enforce effective checks and balances. According to Dr. Ilias, the legislature’s tolerance of inefficiencies exacerbates the problem and undermines fiscal accountability.
The analysis of Nigeria’s 2026 budget exposes a significant disconnect between official budget directives and actual practice. Despite clear guidelines to prioritize existing projects and limit fresh capital expenditure, the government’s budget reveals substantial new project allocations, particularly within the Service Wide Votes.
This situation highlights the challenges facing Nigeria’s fiscal management system, where budget discipline is compromised by late budget presentations, inadequate scrutiny, and weak enforcement of rules by both the Budget Office and the National Assembly.
To improve fiscal sustainability and ensure that scarce public resources are utilized efficiently, it is imperative for the government and its oversight institutions to strengthen the budget process. Timely budget submissions, rigorous project evaluation, and strict adherence to approved guidelines are critical steps toward achieving these goals.
