24 February, 2026
by Mohammed Bello Doka
Nigeria is broke—not in the hyperbolic sense, but in the stark fiscal reality of a country trapped between rising debt obligations and chronically weak revenues. The federal government today operates under severe liquidity strain, where cash shortages dictate spending priorities, capital projects stall for lack of releases, and ministries struggle to fund even approved programmes. Borrowing has become routine, deficits structural, and debt service increasingly dominant in public finances, leaving little fiscal space for development. The result is a nation that can scarcely fund infrastructure, social services, or institutional commitments at scale, even as poverty deepens and economic pressures intensify. In effect, Nigeria’s public finance system has shifted from development financing to debt management and survival budgeting.
Yet, paradoxically, within this same environment of proclaimed scarcity and constrained cash flows, government spending patterns in certain political and administrative spheres convey the opposite impression—one of abundance rather than austerity. This contradiction between fiscal distress and visible expenditure is at the heart of Nigeria’s current economic dilemma.
The Capital Expenditure Collapse: Budgets Without Cash
The most visible casualty of Nigeria’s fiscal distress is capital expenditure. While appropriations grow larger each year, actual releases shrink to near insignificance.
Under the Accountant-General’s “bottom-up cash planning” system, capital releases depend strictly on cash availability. With revenues underperforming dramatically, the result has been devastating for development ministries.
In 2025 alone:
The Ministry of Health received just ₦36 million out of ₦218 billion appropriated—0.0165%.
The Ministry of Interior received no capital releases for two consecutive years.
The Ministry of Transportation received ₦2.57 billion out of ₦256.73 billion (1%).
The Ministry of Women Affairs got ₦394.8 million out of ₦89.8 billion.
The Ministry of Housing received nothing.
The Ministry of Marine and Blue Economy got ₦202 million out of ₦3.53 billion.
The implications are severe:
1. Infrastructure projects have stalled nationwide.
2. Donor-funded programs face co-funding gaps.
3. Contractors abandon sites.
4. 70% of the 2025 capital budget has been rolled into 2026.
Budgets increasingly resemble accounting exercises rather than development instruments.
Poverty Deepens as Debt Rises
While government struggles to fund capital projects, social indicators worsen:
Poverty projected at 62% by 2026.
Approximately 141 million Nigerians living below the poverty line.
Inflation remains elevated despite marginal easing.
Real wages continue to erode.
Economic growth at 4–4.7% remains below Nigeria’s potential and insufficient to meaningfully reduce poverty.
Presidential and Executive Travel: The Optics of Abundance
Against this fiscal backdrop, travel spending stands out prominently.
For 2026:
₦12.2 billion allocated for presidential travel.
₦6.14 billion for the President’s international trips.
₦1.31 billion for the Vice President’s travels.
Between 2024 and 2025, ₦34.39 billion was spent on foreign exchange for official trips. In 2024 alone, ₦23 billion was expended—a 23% increase from 2023.
Since May 2023, the President has embarked on over 43 foreign trips, including 15 in 2025. In January 2026 alone, he reportedly spent 22 days abroad.
While government cites billions in investment commitments, critics argue that tangible outcomes remain unclear relative to the expenditure.
Luxury Vehicles and Convoys
Vehicle procurement further underscores the spending paradox.
In 2026:
₦3.3 billion allocated for presidential vehicle purchases.
₦2.56 billion for operational vehicles.
₦768.9 million for SUVs.
₦115.4 million for tyres.
The State House allocation rose by 135% to ₦11.25 billion.
Elsewhere:
Nigeria Customs allocated ₦14.39 billion for 579 vehicles.
Several states spent billions on luxury cars.
Lawmakers reportedly receive SUVs valued between ₦100–500 million.
Such procurement occurs amid widespread insecurity and capital funding paralysis.
The Presidential Yacht Controversy
The ₦5.09 billion presidential yacht proposed in the 2023 supplementary budget triggered nationwide outrage. Though later removed following public backlash, its initial inclusion reinforced perceptions of misplaced priorities.
Even if reclassified under naval procurement, the symbolism persists: luxury amid austerity.
Legislative Allowances: The High Cost of Governance
Nigeria maintains one of the most expensive legislative structures in the world.
Each senator earns:
₦168,866 basic monthly salary.
Total monthly package: ₦1,063,860.
Additional allowances include:
₦6.08 million furniture allowance per tenure.
₦8.11 million vehicle loan.
Multiple recurring operational allowances.
Total Senate salaries amount to ₦2.84 billion annually, with allowances reaching ₦21.76 billion.
In a country battling fiscal crisis, such packages intensify calls for reform.
Budget Padding and Insertions
Legislative insertions have inflated spending dramatically.
In 2025:
11,222 projects inserted.
₦4.7 trillion value.
₦6.93 trillion allegedly padded.
In 2026:
400+ new budget lines.
₦844.49 billion.
Total insertions potentially reaching ₦3.5 trillion.
Monitoring groups identified abandoned and fraudulent projects, highlighting inefficiencies and leakages.
Recurrent Costs and Bureaucratic Expansion
For 2026:
₦8.4 trillion for personnel.
₦1.2 trillion for overheads.
₦927 billion for pensions.
Nigeria sustains an expansive administrative structure with overlapping mandates and limited productivity gains.
Diplomatic Funding Crisis
Paradoxically, while political spending expands, foreign missions struggle with funding shortages. After recalling ambassadors in 2023, many missions reportedly faced budgetary constraints through 2025, affecting trade diplomacy and consular services.
This diplomatic vacuum contrasts sharply with domestic administrative spending.
Oil Dependence and Structural Weaknesses
Nigeria’s fiscal fragility is worsened by:
Oil dependency for 57% of revenue.
Production shortfalls averaging 1.46–1.63 million barrels daily.
Prices below benchmark assumptions.
Insecurity, power sector inefficiencies, and weak tax collection further constrain revenue.
The Debt Trap Cycle
Nigeria’s fiscal pattern resembles a classic debt trap:
1. Revenue underperforms.
2. Borrowing increases.
3. Debt service rises.
4. Capital spending shrinks.
5. Growth stagnates.
6. Revenue remains weak.
The cycle perpetuates itself.
Lessons from Other Economies
Historical parallels warn of potential consequences:
Zimbabwe’s hyperinflation crisis.
Venezuela’s oil-driven collapse.
Greece’s debt crisis and austerity.
Argentina’s serial defaults.
Each case involved excessive borrowing, weak fiscal controls, and structural vulnerabilities.
The Road Ahead
Nigeria faces a defining choice:
Continue high political and administrative consumption while development stalls; or
Undertake deep fiscal reforms to restore sustainability.
Reforms must include:
1. Reducing governance costs.
2. Strengthening anti-corruption enforcement.
3. Limiting legislative insertions.
4. Prioritizing capital expenditure.
5. Expanding non-oil revenue.
The current trajectory is unsustainable.
If Nigeria is broke—as fiscal indicators clearly demonstrate—then continued extravagance is not merely imprudent; it is dangerous. Without decisive correction, the Father Christmas syndrome may give way to a far harsher economic reckoning.
History’s verdict will depend on the choices made now.
Mohammed Bello Doka can be reached via [email protected]
Tags
opinion