Delayed releases of capital funds in 2025 weakened Nigeria’s funding momentum and slowed progress towards the nation’s long-term progress ambitions, in response to PwC.
The evaluation was made by Kenneth Erikume, Associate at PwC, throughout an Govt Roundtable on Nigeria’s 2026 Price range and Financial Outlook.
He mentioned the funding delays disrupted challenge timelines, compelled rollovers from the 2024 finances into 2025, and complex financial planning at a time when Nigeria is pushing to speed up progress and funding.
The roundtable, themed “Nigeria’s Financial Outlook 2026: The Govt Playbook for Development, Resilience, and Effectivity,” centered on fiscal execution challenges, income mobilisation, and the outlook for public funding as the federal government prepares the 2026 finances.
What Keneth Erikume is saying
Erikume mentioned Nigeria’s recurring finances deficits usually are not the core drawback, arguing as a substitute that weak capital expenditure execution has had an even bigger financial affect. He famous that delayed releases in 2025 meant authorities investments didn’t occur when deliberate, creating what he described as “a time reset on the ambition to construct a $1 trillion economic system.”
In line with him, whereas income efficiency on recurrent spending has at instances exceeded expectations, capital spending has lagged, particularly in 2025.
“The slowness within the launch of funding meant that we primarily carried over components of the 2024 finances into 2025,” he mentioned, including that this positioned “materials stress from an financial standpoint.”
He warned that delayed public funding has broader penalties, as infrastructure and different capital tasks are central to stimulating progress and crowding in personal funding.
“Authorities has to do sure issues to handle that threat,” Erikume mentioned, pointing to income mobilisation as a key lever.
On income, he highlighted the federal government’s ongoing tax reforms, stressing that the main focus just isn’t on elevating tax charges however on deepening tax administration. “There’s loads of focus round effectivity, utilizing information and utilizing know-how,” he mentioned.
He added that with out such a reset, closing the hole between income and expenditure can be tough.
Different key points
Erikume additionally spoke about Nigeria’s debt place, noting that with public debt at about N152 trillion as of mid-2025, borrowing stays unavoidable in 2026. Nevertheless, he burdened that borrowing should be complemented by stronger income technology and improved effectivity at companies akin to Customs.
- On oil revenues, he mentioned weak earnings, safety challenges and underinvestment have continued to weigh on fiscal efficiency, regardless of divestments by worldwide oil corporations to indigenous operators. He cautioned that oil and fuel investments have lengthy lead instances, which means manufacturing features won’t be instant.
- He pointed to exchange-rate stability in 2025 as a notable constructive, attributing it to tight financial coverage and elevated transparency within the FX market. In line with him, these measures helped handle FX demand, enhance reserves and reasonable inflation, which he mentioned has averaged across the mid-teens.
Extra insights
Looking forward to 2026, Erikume mentioned Nigeria will nonetheless have to borrow, however international developments—notably US financial coverage may have an effect on the attractiveness of its debt. He urged the federal government to monetise belongings and develop personal sector participation, particularly in infrastructure, noting that even with a bigger 2026 finances, Nigeria’s per-capita public spending stays far under that of peer economies.
He added that there’s now clearer alignment between fiscal priorities and tax incentives, with healthcare, training, infrastructure and agriculture rising as key focus areas for coverage and funding going into 2026.
Rise up to hurry
Nigeria now routinely operates with overlapping budgets, a apply that intensified from round 2023 when the federal authorities started extending major and supplementary budgets into subsequent fiscal years.
By 2024, a number of finances devices have been energetic concurrently, together with the 2023 major and supplementary budgets, the 2024 major finances, and a 2024 supplementary finances, at the same time as a brand new appropriation was launched.
This overlap has contributed to delays in capital releases, which not too long ago sparked renewed protests by indigenous contractors in Abuja.
- Earlier this month, the contractors staged demonstrations demanding fee of roughly N4 trillion owed by the Federal Authorities for accomplished 2024 capital tasks. Contractors say these money owed relate to tasks that have been totally executed, inspected, and licensed by the related authorities companies. The same protest had taken place in December 2025.
- The Federal Ministry of Finance confirmed the fee of N152 billion following due verification to contractors for verified contracts.
What you must know
To handle this, President Bola Tinubu has directed a transition to a single annual finances cycle starting in April 2026, a transfer aimed toward ending the apply of operating a number of overlapping budgets which have distorted planning, slowed capital releases and weakened accountability throughout ministries, departments and companies.
- He additionally proposed reducing the 2025 finances from N54.99 trillion to N48.32 trillion whereas nonetheless extending its lifespan to March 31, 2026 to permit excellent capital liabilities to be funded and closed.
- Recall that BusinessTimes reported in December 2025 the Federal Authorities directed ministries, departments, and companies to roll over about 70% of their 2025 capital finances into the 2026 fiscal yr to finish ongoing tasks amid tight revenues.
