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Nigeria’s 36 states and the Federal Capital Territory have raised their combined 2026 budget by 47.5 per cent to N40.14tn, up from N27.22tn in 2025.
Despite this total spending expansion, the share allocated to capital projects dropped from 73.24 per cent to 64.34 per cent.
State governments allocated N25.83tn to capital projects in nominal terms, shifting more resources toward rising recurrent expenditure, personnel costs, and debt obligations.
Regional spending patterns show a clear divide across the geopolitical zones.
The Federal Capital Territory, South-South, North-West, and North-East increased their capital allocations for 2026. Conversely, the South-East, South-West, and North-Central cut their infrastructure spending ratios.
The South-East recorded the largest reduction, dropping its capital allocation to 61 per cent from 82.05 per cent in 2025.
Economic experts warn that reducing the proportion of capital expenditure threatens long-term growth and infrastructure development.
Professor Jonathan Aremu highlighted the paradox of shrinking capital project allocations alongside a growing population, while consultant economist Chukwunonso Iheoma warned that insufficient infrastructure will deter foreign investors.
However, analyst Ike Ibeabuchi noted that political leaders often increase recurrent spending ahead of election cycles, while emphasising that a 64 per cent capital allocation still reflects substantial progress compared to historical levels.
