Capital development across several Nigerian states has slowed drastically in the first half of 2025 due to delays in procurement, persistent insecurity, and rising costs of goods and services.

Data from second-quarter Budget Implementation Reports indicate that many states are underperforming on their capital expenditure targets, despite having allocated substantial budgets aimed at accelerating infrastructure growth.

A detailed breakdown of spending between January and June 2025 shows that 31 states collectively spent N2.75 trillion on capital projects—only a fraction of the N17.51 trillion budgeted for capital expenditure in the 2025 fiscal year. This represents a budget implementation rate of just 15.7%, falling far short of expectations.

The poor performance has stalled numerous infrastructure projects and intensified hardships for citizens in need of better roads, healthcare, education, and water systems.

This trend is not new. In 2024, states earmarked N11.34 trillion for capital projects but ended the year with a funding shortfall of N3.98 trillion, largely due to reduced revenues, rising wage bills, and heavy debt servicing.

This year’s mid-year reports show that these structural issues continue to hinder progress.

Capital expenditure typically covers long-term investments intended to enhance infrastructure, improve services, and drive economic growth. Such projects include the construction of roads, schools, hospitals, and public utilities.

Calls for better infrastructure have grown louder following the removal of fuel subsidies and adjustments to the foreign exchange regime—both of which increased revenue inflows to all tiers of government and raised public expectations.

In July, President Bola Tinubu urged governors to channel more resources into rural development, electrification, mechanised agriculture, and poverty reduction. He stressed the importance of collaboration between states and the Federal Government, saying, “Let us change the story of our people in the rural areas. The economy is working, and we’re on the path to recovery, but we must stimulate growth at the grassroots.”

Despite these gains, many states still fall short of delivering on key infrastructure, blaming persistent insecurity, lengthy procurement processes, and other systemic bottlenecks.

Analysis of Q1 and Q2 budget data reveals sharp disparities across states in capital and recurrent expenditure. The 31 states under review spent N2.75 trillion on capital and N2.35 trillion on recurrent expenditure in the first half of 2025.

Some states prioritised infrastructure, while others leaned heavily toward recurrent costs like salaries and overheads.

Enugu State emerged with the highest capital-to-recurrent ratio, allocating 81.9% (N99.59bn) to capital projects compared to N22.06bn for recurrent expenditure. Bayelsa (69%) and Kebbi (68%) also ranked among the most capital-focused states.

Imo State led in total capital spending with N188.1bn, far surpassing its N50.29bn recurrent expenditure. Bayelsa allocated N238.29bn to capital and N107.26bn to recurrent, while Abia spent N133.1bn on capital and N39.73bn on recurrent. Edo and Akwa Ibom both exceeded N170bn in capital spending, with N179.56bn and N179.76bn, respectively.

Other states with a strong capital focus included Borno (N92.99bn vs N61.59bn), Gombe (N93.99bn vs N52.25bn), Jigawa (N82.99bn vs N56.63bn), Kebbi (N78.86bn vs N36.81bn), and Zamfara (N51.1bn vs N37.57bn).

Conversely, several states spent more on recurrent expenses than on development. Kogi topped this group with N133.22bn on recurrent and N73.16bn on capital. Ekiti followed with N101.1bn recurrent vs N56.1bn capital, while Osun disbursed N89.37bn on recurrent and only N57.13bn on capital. Oyo also leaned more towards recurrent expenditure (N129.06bn) than capital (N110.64bn).

A few states maintained a balance. Ogun spent N157.15bn on recurrent and N155.64bn on capital. Others with near parity included Bauchi (N97.29bn vs N91.69bn), Kano (N115.24bn vs N90.79bn), Kwara (N71.59bn vs N62.68bn), Nasarawa (N68.3bn vs N48.49bn), Ondo (N84.37bn vs N61.88bn), Sokoto (N72.18bn vs N69.01bn), and Taraba (N57.88bn vs N24.17bn).

Kaduna recorded a near-even split, spending N108.45bn on capital and N100.31bn on recurrent, while Ebonyi spent N36.89bn on capital and N38.38bn on recurrent.

On average, capital expenditure across the 31 states accounted for 53.9% of total disbursements—indicating that a significant portion of revenue still goes toward recurrent costs, even amid the fiscal boost from subsidy reforms.

The real-world impact of these figures is evident. In Benue State, which spent just N23.32bn on capital and N44.5bn on recurrent, major road and agricultural projects have been stalled by insecurity. Similarly, Cross River allocated only N30.53bn to capital projects, compared to N84.8bn on recurrent spending—constraining efforts to address infrastructure gaps in health and education.

Benue Governor Hyacinth Alia attributed the low capital implementation to persistent insecurity. “The poor recorded performance is largely due to the overwhelming insecurity challenges faced by the state during this reporting period,” the budget document stated.

In June, an attack in Yelwata community, Guma LGA, claimed over 200 lives, further destabilising the region.

Despite raising its 2025 capital budget by over N100bn for aggressive urban and rural development, Benue’s authorities admitted that implementation was hampered in Q2, with contractors unable to mobilise.

Jigawa also acknowledged its capital performance was “below average,” citing delays in procurement. Officials noted that most capital-intensive projects were scheduled for implementation beyond Q1, with Q2 activities largely focused on tendering, approvals, and vetting processes.