Growing delays in federal capital spending are beginning to ripple through Nigeria’s economy, as senators warned on Thursday that unpaid contracts and zero capital allocations to several government agencies could deepen job losses and stall public infrastructure nationwide. The concern was raised during a 2025 budget defence session involving the Office of the Accountant-General of the Federation at the National Assembly in Abuja.
Lawmakers said the absence of capital releases to key Ministries, Departments and Agencies has left hundreds of completed or ongoing projects abandoned, affecting construction firms, suppliers and workers who rely on government payments to stay afloat. According to the Senate Committee on Finance, the situation has worsened since 2024, with contractors increasingly seeking legislative intervention over outstanding bills.
Committee chairman, Sani Musa, told officials that weak cash management was undermining the economic intent of the budget, stressing that delayed implementation translates directly into slowed growth and reduced public confidence. He warned that unless funding mechanisms improve, budget promises would remain paper projections with little real impact on citizens.
Senators pointed to claims that revenue gains from fuel subsidy removal and foreign exchange harmonisation were yet to reflect in capital spending. Danjuma Goje said communities across the country are feeling the strain, as contractors unable to access payments are cutting jobs and abandoning sites, despite assurances that government revenue has improved.
The economic questions intensified with demands for clarity over a reported N28 trillion generated by revenue agencies. Muntari Dandutse argued that if such funds were realised, they should be visible in active projects and timely payments, rather than in mounting arrears that weaken small and medium-scale businesses tied to public works.
Lawmakers also linked the delays to the federal government’s Centralised Payment System, which they said has slowed cash flow to contractors and suppliers. Several senators warned that prolonged bottlenecks could erode trust in government procurement, discourage private sector participation, and inflate project costs due to prolonged timelines.
Responding, the Accountant-General of the Federation, Shamsedeen Ogunjimi, said many of the unpaid obligations stemmed from contracts awarded without secured funding, a practice he described as economically risky. He noted that a directive is now in place barring MDAs from awarding contracts without confirmed cash backing, while adjustments are being made to address challenges in the payment system.
Despite the explanations, senators maintained that the broader economic impact remains a concern, insisting that Nigerians judge budgets by visible outcomes such as roads, hospitals and jobs. The committee later moved into a closed-door session, with lawmakers saying the fate of the Accountant-General’s proposal would depend on assurances that capital spending in 2025 will translate into real economic activity rather than stalled expectations.
