FG Shifts Majority of 2025 Capital Projects to 2026

The Federal Government has instructed ministries, departments and agencies to transfer most of their 2025 capital allocations into the 2026 budget cycle, signalling a shift in how ongoing projects will be funded as revenue tightens. The order is contained in the 2026 Abridged Budget Call Circular issued by the Ministry of Budget and Economic Planning and sent to senior government officials in Abuja.

Under the new directive, only 30 per cent of this year’s capital votes will be cash-backed in 2025, while the remaining 70 per cent must be rolled into next year’s spending plan. MDAs are also barred from proposing fresh capital projects in 2026, as the government wants resources concentrated on projects already listed in the 2025 budget. The circular explains that this approach replaces the previous rollover arrangement and aligns budgeting with the administration’s immediate priorities, including security, infrastructure, education, health, agriculture, power, social investment and youth-focused programmes.

MDAs are expected to prepare their submissions using ceilings already approved in the 2025 executive proposal. Although the document acknowledges rising operating costs, the government said it lacks the fiscal space to raise overhead provisions significantly. Any request above the approved limit will be reduced. Budget entries are to be uploaded through the designated GIFMIS and BIMMS platforms by December 9, and the ministry warned that officers must not upload proposals for MDAs they are not assigned to supervise. Personnel cost estimates for 2026 have also been prepared centrally, using data from IPPIS and earlier submissions.

The medium-term fiscal figures released alongside the circular show that the federal budget will come under more strain next year. Total funds available to the government are projected at ₦54.46tn, slightly lower than the ₦54.99tn expected in 2025. Statutory transfers are forecast to fall, while recurrent non-debt spending is pegged at ₦15.26tn. Debt servicing is set to take a larger share of the budget, rising from ₦13.94tn in 2025 to ₦15.52tn in 2026. Capital spending is projected at ₦22.37tn, below the ₦26.19tn budgeted for 2025, and the capital envelope for MDAs will drop from ₦12.39tn to ₦8.67tn. The fiscal deficit is expected to widen sharply to about ₦20.12tn.

The decision has drawn mixed reactions from economists. Professor Sheriffdeen Tella of Olabisi Onabanjo University questioned the rationale for preparing a new budget when implementation of the 2025 plan barely commenced in December. He also raised doubts about the accuracy of the projected ₦20tn deficit, warning that starting a fresh cycle without data from the current year could distort fiscal planning and create a situation where multiple budgets run at the same time.

The President of the Nigerian Economic Society, Professor Adeola Adenikinju, expressed concern over the disruption of the January–December budget cycle. He noted that the late submission of the 2026 proposal undermines proper scrutiny by lawmakers and reduces the time MDAs have to defend their estimates, contributing to what he described as a disorderly budgeting environment.

However, some analysts see merit in the rollover. The Director of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, argued that carrying forward unspent capital provisions was unavoidable, given the backlog from the previous year and the limited revenues available. He said the decision would improve budget credibility and prevent the repetition of unrealistic capital allocations that remain largely unimplemented.

Development economist Dr Aliyu Ilias took a different view, saying the shift amounts to denying citizens the benefits of the 2025 capital budget. He said the move disrupts continuity and could create oversight gaps that weaken accountability. Ilias also faulted the National Assembly for allowing the recurring delays that lead to these rollovers, arguing that tighter legislative scrutiny could prevent the pattern.

Despite the criticisms, the government insists the 2026 budget will place more emphasis on community-level development, infrastructure, security and domestic production. At a meeting with the Nigeria International Non-Governmental Organisation Forum in Abuja, the Minister of Budget and Economic Planning, Senator Abubakar Bagudu, said the government’s fiscal decisions are guided by the Medium-Term Expenditure Framework approved by the Federal Executive Council. He noted that the administration aims to steer the economy toward a $1tn target, with ward-level development forming a key part of its strategy.