When Budgets Fail Nigerians

As Nigeria’s budgets grow bigger, so do allegations of padding, raising fresh doubts about implementation and accountability, writes Festus Akanbi

The annual budget is the most important economic policy document of any government. It translates policy priorities into roads, schools, hospitals, security, power projects and other public services. Yet, in Nigeria, the budget has increasingly become a source of controversy rather than confidence. Instead of serving as a development blueprint, successive appropriation exercises have been dogged by allegations of budget padding, opaque project insertions, duplication of expenditures and questionable constituency allocations.

Those concerns have resurfaced as the National Assembly scrutinises the proposed N58.47 trillion 2026 budget, raising fresh questions about whether Nigeria’s budgeting framework promotes development or merely accommodates political interests.

Nothing has illustrated these concerns more dramatically than the controversy surrounding the Presidential Foreign Investment Promotion Council (PFIPC), an agency the Presidency later disowned as fictitious despite having been allocated about N1.3 billion in the 2026 Appropriation Act. The arrest and prosecution of its self-acclaimed Director-General, Adeniyi Adeyemi Matthew, on allegations of forgery, impersonation and fraud have shifted public attention from the individual to the budgeting system itself. The obvious question is how a non-existent agency secured a budgetary allocation in the nation’s most important fiscal document. Although investigations have been ordered, the episode has exposed glaring weaknesses in budget preparation, verification and legislative scrutiny, reinforcing fears that fictitious agencies and unauthorised expenditures can slip through existing institutional safeguards.

At the heart of the debate is Nigeria’s envelope budgeting system. Under the arrangement, Ministries, Departments and Agencies (MDAs) receive expenditure ceilings before preparing detailed proposals. Designed to enforce fiscal discipline, critics argue that it has instead encouraged routine spending rather than strategic planning. Chairman of the Senate Committee on Finance, Senator Sani Musa, recently declared that the model had failed and should give way to a priority-based budgeting framework aligned with measurable national outcomes. The Senate also faulted the centralised contractor payment system for delaying payments on contracts executed in 2024 and 2025.

Fiscal experts insist the challenge extends beyond the budgeting model. BudgIT Country Director, Vahyala Kwaga, argues that envelope budgeting succeeds only where governments rely on rigorous planning, credible data and evidence-based policymaking. According to him, Nigeria lacks these institutional foundations, while legislative oversight has failed to adequately interrogate budget proposals or implementation records. He also accuses the government of increasing opacity in fiscal reporting.

Nigeria’s implementation record reinforces the criticism. Although annual budgets have risen from below N10 trillion a decade ago to N54.99 trillion in 2025 and N58.47 trillion proposed for 2026, implementation has consistently lagged due to revenue shortfalls, rising debt-service obligations, foreign exchange pressures and extensive legislative alterations.

BudgIT’s review of the 2025 Appropriation Act illustrates the scale of the distortions. The organisation reported that lawmakers inserted 11,122 projects worth N6.93 trillion, representing 12.5 per cent of the national budget. It identified 238 projects valued above N5 billion each, alongside hundreds of other allocations it considered poorly justified or inconsistent with national priorities.

The report also highlighted 1,477 streetlight projects costing N393.29 billion, 538 boreholes worth N114.53 billion, 2,122 ICT projects valued at N505.79 billion and N6.74 billion for the empowerment of traditional rulers. It further revealed that the Ministry of Agriculture’s capital allocation expanded from N242.5 billion to N1.95 trillion after the insertion of 4,371 projects worth N1.72 trillion. In contrast, numerous projects were assigned to agencies outside their statutory mandates.

Further fuelling concerns, Senate Chief Whip, Senator Tahir Monguno, warned that the federal government’s repeated failure to implement duly enacted Appropriation Acts despite improved revenue could amount to a breach of the law and even constitute an impeachable offence.

Public disquiet has also grown over the N780 million allocation for church outreach in Bende Federal Constituency, with critics describing Deputy Speaker Benjamin Kalu’s defence as symptomatic of misplaced priorities at a time of severe fiscal constraints.

Similar concerns have emerged in the proposed 2026 budget, where agencies with mandates unrelated to infrastructure reportedly received allocations for roads, classrooms, hospitals, solar streetlights, motorcycles and electricity projects. They include the Institute of Peace and Conflict Resolution, the Nigerian Press Council, the National Root Crops Research Institute, the New Partnership for Africa’s Development Office and the Oil and Gas Free Zones Authority. Critics argue that assigning projects to agencies without implementation capacity weakens accountability and increases the likelihood of abandoned projects.

Budget padding itself is hardly new. Former President Olusegun Obasanjo rejected the 2000 Appropriation Bill after accusing lawmakers of inflating expenditure. President Goodluck Jonathan also resisted increases to the National Assembly’s allocation in 2011 before a compromise was reached. During Muhammadu Buhari’s administration, allegations ranged from N90 billion in 2019 to N770.72 billion in questionable insertions between 2020 and 2023. In 2024, Senator Abdul Ningi alleged that N3.7 trillion had been inserted into the budget, a claim rejected by the Senate but which nevertheless intensified public debate.

The consequences are evident. Projects approved in successive budgets remain abandoned, contractors accumulate unpaid certificates, hospitals and schools deteriorate, while infrastructure deficits continue to widen. For ordinary Nigerians battling inflation, unemployment and declining purchasing power, the recurring cycle of ambitious budgets and poor implementation explains why public spending rarely translates into improved living standards.

Questions also persist over constituency projects. Although lawmakers are constitutionally empowered to appropriate funds and provide oversight, legal analysts argue that their growing involvement in project nomination and execution undermines the doctrine of separation of powers. Previous investigations by the Independent Corrupt Practices and Other Related Offences Commission uncovered duplicated projects worth over N20 billion, including projects allegedly sited on private properties or repeatedly budgeted.

Former APC National Publicity Secretary, Timi Frank, believes repeated allegations of inflated appropriations, fictitious agencies and weak accountability have further eroded public confidence. While the Senate has dismissed recent allegations as politically motivated, the recurrence of similar controversies across successive administrations suggests that Nigeria’s budgeting process requires structural reform rather than partisan exchanges.

Analysts broadly agree on the way forward: replace envelope budgeting with a priority-based model; strengthen evidence-based planning; subject legislative insertions to transparent scrutiny; assign projects strictly within MDAs’ statutory mandates; publish timely implementation reports; strengthen citizen participation; enforce the Fiscal Responsibility Act; and independently verify project costs and constituency allocations.

Ultimately, the credibility of Nigeria’s budget matters more than its size. The PFIPC scandal has demonstrated that the real challenge is not merely how much government spends but whether public funds are allocated through a transparent, credible and accountable process. 

Until those standards become the defining features of Nigeria’s budgeting system, annual budgets will continue to inspire lofty expectations on paper while delivering disappointing outcomes for millions of Nigerians.