President Bola Tinubu’s administration entered the third quarter of 2025 with a promise to stabilise the economy, boost growth and invest heavily in infrastructure.
On the surface, some of the numbers appear encouraging. Economic growth strengthened, inflation slowed sharply, and non-oil revenue collections exceeded expectations.
Beneath those positive indicators, however, the government’s budget implementation report reveals a troubling reality.
It shows that critical projects across infrastructure, power, transportation, water resources and healthcare were starved of funding as capital spending collapsed far below target.
The report, ‘2025 Third Quarter Budget Implementation Report’, was released recently — eight months after the statutory deadline.
Pinnacle Daily analysis of the report shows that while the government projected ₦4.63 trillion for capital expenditure by Ministries, Departments and Agencies (MDAs) during the quarter, only ₦780.28 billion was actually released and cash-backed.
This represents a funding gap of ₦3.85 trillion and an 83.16 per cent shortfall against the quarterly target.
The figures suggest that despite repeated assurances that infrastructure development remains central to the administration’s economic agenda, capital projects received far less attention than other spending priorities during the review period.
Acknowledging the capital spending shortfall, the Budget Office in its assessment stressed the need to “institutionalise value-for-money audits” and ensure that scarce public resources are directed toward “high-impact projects with measurable economic returns.”
Growth Without Investment
The irony is that the quarter produced some of the strongest macroeconomic indicators seen in recent years.
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Nigeria’s economy grew by 3.98 per cent in real terms during the third quarter of 2025, higher than the 3.86 per cent recorded in the corresponding period of 2024.
Inflation also eased significantly, falling to 18.02 per cent in September 2025 from 32.70 per cent a year earlier.
The government’s efforts to strengthen non-oil revenue collection also yielded results.
Gross non-oil revenue exceeded projections by 7.74 per cent, driven largely by stronger Company Income Tax and Value Added Tax collections, which surpassed targets by 31.19 per cent and 21.74 per cent respectively.
Yet these gains failed to translate into increased investment in projects capable of sustaining growth over the long term.
Instead, capital spending became one of the biggest casualties of the government’s fiscal management challenges.
Oil Sector Weakness Starved Projects of Funds
A major reason for the capital spending collapse was the severe underperformance of the oil sector.
The report shows that gross oil revenue fell 61.8 per cent below budget projections. Oil production averaged 1.64 million barrels per day during the quarter, significantly below the budget benchmark of 2.12 million barrels per day.
At the same time, international oil prices averaged $68.50 per barrel, lower than the benchmark price of $75 per barrel.
The combined effect of lower production and weaker prices created a substantial revenue gap for the government.
A further review of the report indicates that federal revenue reached ₦7.70 trillion during the quarter, far below the projected ₦10.22 trillion.
With fewer resources available than expected, the government was forced to make difficult spending decisions as the choices it ultimately made reveal where its priorities lay.
Debt Service Took Priority Over Development Projects
While capital releases fell dramatically short of the target, debt obligations continued to receive substantial funding.
The report shows that debt service consumed ₦3.41 trillion during the quarter alone. Although slightly below budget, the debt service burden remained high enough to constrain the government’s fiscal flexibility.
Faced with revenue shortfalls, the administration prioritised non-discretionary spending commitments such as debt servicing and personnel costs, leaving capital expenditure as the main area for adjustment.
The consequence was that roads, rail projects, power infrastructure, water schemes and healthcare investments faced significant funding constraints.
In practical terms, the government spent more than four times as much on debt service during the quarter as it released funds for capital projects.
That imbalance raises important questions about the administration’s ability to deliver the infrastructure-led growth strategy it has consistently promoted.
Bureaucratic Delays Deepened the Problem
The funding shortfall was not driven solely by weak revenues, as the report identifies cash management bottlenecks and delays associated with the Bottom-Up Cash Plan arrangement as major factors slowing the release of funds to ministries and agencies.
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These administrative challenges disrupted the flow of money for project execution and contributed to delays in implementing approved capital programmes.
The result was a situation where projects approved in the budget could not proceed at the pace originally envisaged because funding was either delayed or unavailable.
For an administration that has repeatedly stressed the importance of efficient public expenditure, the persistence of such bottlenecks highlights weaknesses in budget execution.
Pointing to administrative delays as a major contributor to weak project implementation in the review quarter, the Budget Office called on the authorities to “streamline cash release mechanisms to improve predictability and project delivery timelines.”
Infrastructure Projects Among the Biggest Casualties
Although the report does not identify individual ministries by name, it indicates that infrastructure and priority-sector agencies were among those most affected by the funding shortfall.
Projects in transportation and infrastructure, including roads and rail development, faced constraints.
The same was true for power sector projects, water infrastructure initiatives, irrigation schemes and health sector investments, including the upgrading of primary healthcare centres and vaccine procurement.
The impact was even more severe for projects expected to be financed through multilateral and bilateral project-tied loans.
The report shows that actual expenditure from such loans was zero during the quarter, despite a projected spending target of ₦841.07 billion.
This represents a 100 per cent shortfall and suggests that several externally funded projects may have experienced delays or failed to commence as planned.
Statutory transfer beneficiaries also recorded significant funding gaps, receiving far less than projected during the quarter. Only Government-Owned Enterprises achieved their capital expenditure targets.
The Cost of Underfunding Development
The capital spending figures expose a fundamental challenge facing the Tinubu administration.
Looking ahead, the Budget Office said it would intensify efforts to strengthen budget implementation and project management.
“Efforts would also be geared towards promoting efficiency in budget implementation, while guaranteeing effective project management in the succeeding quarter of 2025 and beyond,” it stated.
While these proposals signal recognition of the problem, the scale of the funding gap raises broader questions about the administration’s ability to translate budget allocations into completed projects.
For many analysts, the challenge is no longer simply one of budget design but of execution.
Until capital releases become more predictable and project implementation improves, economic stabilisation gains may struggle to translate into visible infrastructure development and long-term growth.
In its assessment of the report, the Alliance for Economic Research and Ethics described Nigeria’s fiscal position as remaining under severe pressure, Pinnacle Daily reported.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X