Billions in New Projects Emerge in Proposed 2026 Budget, Defying Earlier Directives
An in-depth analysis of the proposed 2026 budget reveals the inclusion of at least N3.50 trillion in new projects, a development that appears to contradict earlier directives aimed at prioritizing the completion of existing initiatives and controlling expenditure. This influx of new capital allocations comes despite official guidance instructing Ministries, Departments, and Agencies (MDAs) to carry over 70 per cent of their 2025 capital allocations into the following fiscal year and to refrain from introducing new capital projects.
The figures compiled from the 2026 Appropriation Bill indicate that new project entries across MDAs alone amount to N844.49 billion. When Service Wide Votes are factored in, this total escalates significantly to N3.50 trillion. This substantial provision for new projects represents approximately 15.09 per cent of the proposed N23.21 trillion capital budget for 2026.
A significant portion of these new project allocations, totalling N2.66 trillion, is concentrated within the Service-Wide Votes. This segment of the budget often encompasses broader national programs, security provisions, and central government initiatives, indicating that a considerable amount of new spending is being channelled through these overarching categories rather than directly through ministerial capital lines.
Background: The Directive for Project Prioritization
In December 2025, a directive was issued by the Federal Government mandating ministries, departments, and agencies to roll over 70 per cent of their 2025 capital budgets into the 2026 fiscal year. This measure was intended to reinforce the administration’s commitment to completing ongoing projects and to manage spending pressures stemming from weaker revenue streams.
This instruction was formally communicated through the 2026 Abridged Budget Call Circular, distributed by the Federal Ministry of Budget and Economic Planning to all ministers, service chiefs, heads of agencies, and senior government officials. The circular explicitly stated: “MDAs are to upload 70 per cent of their 2025 FGN Budget to continue in FY2026. All such rollover and uploads MUST be in line with the immediate needs of the country as well as the government’s development priorities that align with the policy direction of the new administration, which hinges on National Security, the Economy, Education, Health, Agriculture, Infrastructure, Power & Energy, as well as social safety nets, women & youth empowerment.”
The directive emphasized that ministries and agencies were expected to maintain continuity with allocations already approved in the 2025 budget, rather than seeking funding for entirely new projects. All expenditures were slated for rigorous scrutiny to ensure only essential spending was approved and to guarantee value for money.
The Reality: A Surge in New Project Inclusions
Despite these clear directives, an examination of the proposed 2026 Appropriation Bill reveals that no fewer than 82 MDAs have included at least one new capital or program item. These new entries span a wide spectrum, encompassing over 400 distinct project lines. The scope ranges from substantial infrastructure and health investments running into billions of naira to smaller, community-level interventions such as the provision of boreholes, training programs, and equipment procurement.
Key Components of New Project Allocations:
- Service Wide Votes: This category accounts for a substantial portion of the new project portfolio, featuring 18 new projects in the 2026 appropriation bill. These allocations are earmarked for financing various programs, security-related expenditures, liabilities, and central initiatives.
- Outstanding Contractors’ Liabilities: The largest single allocation within the Service Wide Votes is N1.70 trillion designated for outstanding contractors’ liabilities from 2024. This single item constitutes approximately 48.55 per cent of the total N3.50 trillion allocated for new projects, including those within Service Wide Votes.
- Development Finance Initiatives: Three separate allocations of N100 billion each are included for the Nigeria Development Finance Corporation, the Economic Transformation Finance Programme, and the Nigeria Growth Investment Fund. These three funding lines collectively amount to N300 billion.
- Security and Defence: The Service Wide Votes also include provisions for the capitalization of INFRACO (N20 billion), a special operations fund for the Department of State Services (DSS) (N30 billion), and N110.31 billion allocated to the Nigerian Air Force. This latter amount is intended to cover outstanding obligations related to the procurement of six T-129 ATAK helicopters and three Mi-35 helicopters.
- Presidential Air Fleet and Forestry: A significant allocation of N283.85 billion is designated for presidential air fleet logistics and management, which also encompasses the operation of the National Forest Guard.
- New MDA Start-up Grants: A recurrent expenditure-related take-off grant for new MDAs is set at N41.12 billion. Additionally, a capital take-off grant for 12 new MDAs, primarily in the health and education sectors, totals N19.50 billion.
- Other Provisions: Other service-wide provisions include adjustments for pension increases due to consequential adjustments and payments of gratuities to civil servants.
Leading MDAs with New Project Allocations:
Among the MDAs, five stand out with the highest value of new project provisions:
- Budget Office of the Federation: This office has the largest MDA-level new project allocation at N375 billion. This provision is for additional financing related to a multilateral or bilateral tied loan for the Power Sector Recovery Operation. This single allocation accounts for approximately 44.41 per cent of the total N844.49 billion allocated for new MDA projects and about 10.71 per cent of the overall N3.50 trillion new project total.
- Federal Ministry of Transport Headquarters: This ministry has N210.53 billion allocated for new projects. This includes N68.50 billion for consultancy services for the Lekki Ijebu Ode Ore Kajola railway and coastal railway, and the Badagry Apapa Tin Can line. An additional N142.03 billion is designated for the construction of six bus terminals and transportation facilities across the six geopolitical zones under the national public transportation initiative. These two entries represent about 24.93 per cent of the MDA new project total and about 6.01 per cent of the overall new project budget.
- National Library of Nigeria: The National Library has a new project provision of N24 billion for the structural renovation and space upgrade of its facilities across the six geopolitical zones. This is the third largest MDA new project amount and represents approximately 2.84 per cent of the total MDA new projects.
- National Blood Service Commission: This commission has N15 billion allocated for new projects. This includes N10 billion for the construction and equipping of a national blood service centre and strategic national blood reserve in Abuja, and N5 billion for the reconstruction or rehabilitation of NBSC state offices. These combined projects account for about 1.78 per cent of the MDA new project total.
- Sokoto Rima River Basin Development Authority: This authority has N9.14 billion in new projects. These include:
- Construction of solar mini grids in selected locations within its catchment area (N2 billion).
- Construction of all-in-one solar street lights for security lighting (N1 billion).
- Construction of rural roads to selected rural communities (N3 billion).
- Supply of water pumps for irrigation to the Isa and Sabon Birni federal constituency (N140 million).
- Supply of 3-inch solar-powered water pumping machines to farmers in Kebbi State (N1 billion).
- Provision of a small town water supply system with reticulation (N1 billion).
- Provision of empowerment materials to support youth livelihoods (N1 billion).
This portfolio represents about 1.08 per cent of the total MDA new projects.
Other Notable New Project Allocations:
Beyond these top five, other MDAs with significant new project allocations include health and social sector institutions, with provisions ranging from N5 billion to N6.22 billion per entity, alongside several teaching hospitals and medical centres.
- Vehicle Purchases: Approximately N5.85 billion is allocated for new vehicle purchases across various MDAs, with notable allocations including N1.5 billion for vehicles at FUT Iyin Ekiti, N600 million at FUADSI, and N500 million at JUTH.
- Furnishing and Office Equipment: N2.93 billion is designated for furnishing and office equipment, driven by N1.18 billion for two medical complexes at NAUTH Nnewi, N435 million for the Air Power Centre of Excellence, and N250 million for a Pharmacy Council zonal office.
- Renovation and Refurbishment: A total of N29.88 billion is allocated for renovation and refurbishment projects, dominated by the N24 billion for the National Library upgrade and N5 billion for Blood Service offices.
- Residential and Staff Accommodation: N25.29 billion is earmarked for residential and staff accommodation projects, notably N16.48 billion for Defence Headquarters facilities and N7 billion for DSS housing.
A Recurring Pattern of Non-Compliance
This is not the first instance where the Federal Government has sought to restrict the introduction of new projects into the national budget. In December 2024, directives were issued for the 2025 budget, instructing all MDAs to exclude new projects unless they directly contributed to the completion of ongoing initiatives. The 2024 Federal Government Budget Call Circular explicitly stated that new projects would not be admitted into the 2025 capital budget unless MDAs could demonstrate that sufficient resources had been allocated to finalize existing projects.
The circular clearly articulated: “Again, the thrust of the FGN’s capital expenditure programme in 2025 will be the completion of as many cardinal ongoing projects as possible, rather than starting new projects. Thus, MDAs are hereby advised that new projects will not be admitted into the capital budget for 2025 unless adequate provision has been made for the completion/work programme of all ongoing projects.”
Furthermore, MDAs were instructed to meticulously scrutinize and justify their proposed projects and programs, ensuring alignment with the nation’s immediate needs and the government’s key development priorities, which include national security, economic stability, education, health, agriculture, infrastructure, power and energy, as well as social safety nets and the empowerment of women and youth.
Concerns Over Scrutiny and Fiscal Discipline
Despite these repeated directives, it appears that MDAs frequently disregard these guidelines without apparent scrutiny from the Budget Office of the Federation or the National Assembly.
Economists have raised concerns about the effectiveness of the budget process. Professor Adeola Adenikinju, National President of the Nigerian Economic Society, has argued that the late presentation of budgets to the National Assembly hinders thorough scrutiny. He stated, “The 2026 budget should have been in the National Assembly for consultation so that we can keep to this January 1st thing. That makes our fiscal system predictable.” He further warned that the rush to approve budgets “does not allow for proper analysis” and prevents ministries and departments from adequately defending their proposals, contributing to a disorganized fiscal environment.
Dr. Aliyu Ilias, a development economist and Chief Executive of CSA Advisory, has pointed to what he describes as “fiscal discipline problems” within the Federal Government. He believes that government performance in fiscal and budget discipline “for now has not done well” and suggests that these lapses may be intentional, becoming a recurring error. Dr. Ilias also places blame on the National Assembly for its perceived failure in oversight duties, stating that the legislature tolerates inefficiencies and is thus “failing in the sense that it is their own responsibility to make sure that those things do not really fly.”
