By DAYO ADESULU
⚖️ Critical Analysis: Budget Extensions & Its Implications on Nigerians
Critical analysis carried out on budget extensions in a given state has shown some grave implication in the long run on some key sectors and the Nigerian people at large.
1. Systemic Governance Weakness Exposed
The second budget extensions of the 2024 budget’s capital component is not just an administrative adjustment—it is a symptom of chronic dysfunction in Nigeria’s budgetary execution process. Extending a budget meant for 12 months into a 24-month cycle suggests:
- Severe capacity limitations within MDAs (Ministries, Departments, and Agencies).
- Poor planning and forecasting models, as highlighted by economists like Prof. Akpan Ekpo.
- A lack of accountability in government spending—citizens cannot assess the impact of a budget that never ends.
- Soludo Submits N260 Billion Budget For 2023
In short, this move exposes deep-rooted inefficiencies in public financial management, weakening confidence in the government’s ability to execute its own plans.
2. Fiscal Indiscipline Undermines Credibility
Operating two budgets simultaneously—the unclosed 2024 budget and the newly enacted 2025 budget—is not just irregular, it’s fiscally irresponsible. It blurs the lines between planning and performance, making it nearly impossible to:
- Accurately track capital expenditure and project completion.
- Evaluate the success or failure of programs.
- Enforce discipline in budget implementation.
This undermines the government’s credibility with investors, development partners, and the Nigerian people.
3. Direct Impact on Ordinary Nigerians
The budget extensions may seem bureaucratic on the surface, but the real losers are everyday Nigerians:
- Delayed payment of allowances: Government workers are reportedly owed travel and operational allowances.
- Stalled infrastructure projects: Schools, roads, hospitals, and water projects across states face abandonment or severe delays.
- Job losses and delayed contracts: Contractors unpaid for months may lay off staff, directly affecting employment.
As echoed by ministry insiders, this has led to debt accumulation for workers, decreased morale, and inefficiencies in public service delivery.
4. Inflationary Risks and Economic Consequences
Economists like Paul Alaje and Prof. Ekpo warn of inflationary pressures as both the 2024 and 2025 budgets pump money into the system concurrently. Implications include:
- More money chasing fewer goods, pushing up prices.
- Exchange rate instability, especially if deficit financing relies on external borrowing or money printing.
- Increased cost of living for average Nigerians already struggling with high fuel prices and food inflation.
Moreover, as Nigeria teeters on stagflation (slow growth + rising inflation), such fiscal mismanagement compounds the problem.
5. Weak Private Sector Confidence
As Dr. Muda Yusuf rightly points out, the historically poor performance of capital budgets damages investor confidence:
- Private contractors become skeptical of engaging with government.
- Project financing becomes harder due to unpredictable cash flows.
- Capital flight could increase as investors turn to more stable economies.
Without budget credibility, Nigeria risks becoming a high-risk investment destination, stifling growth in critical sectors like construction, manufacturing, and energy.
6. Dangerous Precedent for Future Budgets
Repeatedly extending budget implementation sets a dangerous policy precedent:
- Erodes constitutional and fiscal sanctity of the budget as a one-year plan.
- Encourages careless project planning with no real consequence for underperformance.
- Politicizes the budget process, enabling pork-barrel projects and misaligned spending priorities.
This could institutionalize “budget rollover culture”, making it harder to enact reforms that demand strict financial discipline.
7. Missed Opportunity for Reform
Instead of using these delays as a moment for reform, the government appears content with extending deadlines. What’s urgently needed:
- Budget execution audits to identify systemic bottlenecks.
- Automation and real-time monitoring of capital expenditure.
- Clear penalties for non-performance by MDAs.
- Fiscal transparency to restore public trust.
Without structural change, extensions become mere political fixes for economic failures.
📌 Bottom Line: Nigerians Deserve Better
The repeated extension of Nigeria’s 2024 budget’s capital implementation to December 2025 reveals a deeply flawed budgetary system, eroding trust in government institutions. The implications are not abstract—they touch the daily lives of workers, contractors, and citizens, who bear the brunt of delays, inflation, and stagnation.
While leaders like Senator Adeola argue it’s necessary to complete projects, the real issue lies in why those projects weren’t completed on time. Nigerians are left with a government that promises but does not deliver—and that gap between intention and action continues to widen.
🏗️ 1. Infrastructure and Construction
- Severe under-execution of capital budgets—state-level data shows only ~28–34% of capital allocations were spent in 2023-2024 thenationonlineng.net+1nigeriamag.com+1drpcngr.org.
- Delays and cost overruns in road, dam, and energy projects are fueled by inflation, forex volatility, and poor financial planning zawya.com.
- This slows infrastructural expansion, raises construction costs, and halts job creation. Contractors complain of months-long unpaid invoices, leading to layoffs and indebtedness .
Implication for Nigerians:
Travel is more arduous, unreliable power reduces productivity, and rural areas remain underdeveloped. Contractors and workers face financial strain due to stalled payments.
🏥 2. Healthcare
- Historically, only 17–27% of Federal health capital budgets are actually released/utilized businessday.ng+1thenigerianvoice.com+1cisinigeria.org+3drpcngr.org+3drpcngr.org+3.
- Hospitals—especially in rural areas—lack basic diagnostic tools, oxygen, and beds. PHC centers remain under-equipped en.wikipedia.org.
- Budget elongation disrupts funding flow and exposes vulnerable citizens to inflation-driven healthcare costs, pushing many into poverty .
Implication for Nigerians:
Delayed facility upgrades and equipment procurement mean poorer healthcare access, risking lives and increasing out-of-pocket spending.
🎓 3. Education
- The 2025 budget allocates ~₦827 billion to educational infrastructure—but funding delays risk undermining these plans punchng.com+15thenationonlineng.net+15drpcngr.org+15.
- Incomplete school builds, lack of labs, and delayed scholarship disbursements stall learning outcomes and teacher morale.
Implication for Nigerians:
Children receive limited access to modern classrooms and learning tools, exacerbating educational inequality and future job-readiness issues.
💸 4. Workers and Contractors
- Government workers face withholding of allowances, while contractors endure cash-flow crises and loan liabilities .
- The lingering use of the 2024 budget delays 2025 allocations, stalling allowances, pensions, and awards tied to the new budget.
Implication for Nigerians:
Family incomes shrink, financial planning becomes impossible, and public sector morale and service delivery deteriorate.
📈 5. Macro-Economic Impact
- Economist warnings: simultaneous execution of two budgets risks higher money supply and inflation spikes .
- Nigeria’s inflation hovered at 27–34%, eroding real incomes and pushing commodity prices beyond affordability .
- Chronic budget rollovers make fiscal projections and investor confidence unreliable .
Implication for Nigerians:
Cost-of-living increases further, while savings and investments lose value, triggering strikes and economic discontent .
🏛️ 6. Governance & Accountability
- The tradition of extending budgets points to poor forecasting and execution capabilities, as criticized by economists sibni.org+15theafricareport.com+15zawya.com+15.
- It cultivates a culture of dependency and complacency—where MDAs expect more time without delivering results.
- This fiscal confusion shields mismanagement, reduces transparency, complicates audits, and undermines citizens’ ability to hold leaders accountable.
✅ Summary: What This Means for the Average Nigerian
- 🧱 Infrastructure stagnation undermines connectivity, mobility, and economic growth.
- 🏥 Healthcare deficiencies make Nigerians vulnerable to illness and financial hardship.
- 🎒 Education quality gaps limit opportunities for youth.
- 📉 Worker and contractor suffering diminishes livelihoods and trust in government.
- 💰 Inflation risks worsen living standards amid economic stagnation.
- 🤝 Eroding accountability undercuts long-term reforms and public confidence.
🔧 Policy Recommendations for Immediate Relief
- Fast-track the repeal of old budgets and transition fully to 2025 allocations.
- Automated spending with real-time tracking to ensure timely execution.
- Enforce strategic deadlines: allow rolling only into Q1 of the next year—not arbitrarily.
- Link disbursements to project milestones and annual performance audits.
- Protect workers and contractors by making their payments non-negotiable.
The continued extension of capital budgets is not merely a bureaucratic tweak—it’s a systemic flaw with real-world consequences for everyday Nigerians. Without urgent reforms in planning, execution, and transparency, this crisis will keep deepening—turning government promises into perpetual delays.
