Nigeria slowed down on its capital expenditure during the first half of 2024.
According to data from the Central Bank of Nigeria, CBN, the country recorded an expenditure of N1.99 trillion during this period, down from N2.68 trillion in the corresponding period of last year. This is a 25.3 per cent decline.
According to the figures from the CBN, there was a shift in spending towards recurrent costs and debt servicing.
A month-by-month analysis shows that there was a zero allocation to capital expenditure in January 2024, compared to N379.1bn in January 2023.
Spending, however, peaked in February 2024 with N893.9bn, representing a significant increase from the previous month but still only 36.3 per cent higher than February 2023’s N656.3bn.
However, CAPEX dropped sharply in March 2024 to N258.6bn, reflecting a 65 per cent decline from February 2024 and a 66.1 per cent decrease compared to March 2023’s N763.6bn.
In April 2024, capital spending amounted to just N42.1bn, marking a 36 per cent drop from the N64.5bn spent in April 2023.
The months of May and June 2024 showed some recovery, with CAPEX rising to N478.9bn and N325.4bn, respectively.
However, these figures remained below the corresponding months of 2023, when N300bn and N513.3bn were allocated, highlighting a consistent downward trend.
Analysts believe that the uneven monthly spending reflects growing fiscal constraints as the government grapples with rising debt obligations and recurrent expenditures.
Capital expenditure represented about 53.35 per cent of the N3.73tn retained revenue in H1 2024, a drop from the 96.06 per cent share in H1 2023.
The uneven monthly spending reflects growing fiscal constraints as the government grapples with rising debt obligations and recurrent expenditures.
Capital expenditure represented about 53.35 per cent of the N3.73tn retained revenue in H1 2024, a drop from the 96.06 per cent share in H1 2023.
This decline points to a reduced focus on infrastructure investment, which may constrain economic growth and job creation.
However, total government expenditure rose by 29.5 per cent from N9.39tn in H1 2023 to N12.17tn in H1 2024, driven largely by recurrent spending.
Recurrent expenditure surged by 51.4 per cent, climbing to N10.17tn in H1 2024 from N6.72tn in H1 2023.
Of this, 68.2 per cent was allocated to debt servicing, which soared by 68.8 per cent, reaching N6.04tn compared to N3.58tn a year earlier.
Personnel costs also increased by 17.6 per cent to N2.32tn, further squeezing funds available for capital projects.
The widening gap between revenue and expenditure resulted in a 28 per cent rise in the fiscal deficit, which expanded from N6.59tn in H1 2023 to N8.44tn in H1 2024.
This growing deficit raises concerns over fiscal sustainability as more resources are diverted towards debt repayment and administrative costs, leaving less for growth-oriented investments.