The Nigerian Senate and House of Representatives have jointly approved a second extension of the capital component of the 2024 federal budget, pushing the deadline to December 31, 2025. This move has drawn criticism from various quarters, including economists and financial analysts, who argue that repeated extensions reflect poor government execution capacity and risk undermining fiscal discipline.
The Senate’s decision followed an expedited passage of the amendment bill during plenary, with Deputy Senate President Barau Jibrin announcing the approval. Senator Olamilekan Adeola, Chairman of the Senate Committee on Appropriation, explained that the extension was necessary to complete ongoing capital projects and address funding shortfalls. He stressed that without the extension, numerous federal projects risk abandonment.
In the House of Representatives, Speaker Tajudeen Abbas supported the extension, noting that the capital component had not been sufficiently implemented. The House passed the bill for second reading and referred it to the Committee on Supply for further action.
President Bola Tinubu had initially requested the first extension in late 2024, citing the need to optimize budget allocations and ensure project completion. However, as the June 30, 2025 deadline neared, many projects remained incomplete, prompting the fresh extension.
This extension means Nigeria is effectively running two budgets simultaneously in 2025: the extended 2024 budget and the already approved 2025 budget. A federal ministry source revealed that the 2025 budget implementation has not yet started, with operations still funded under the 2024 budget, causing delays in contractor payments and staff allowances.
Economists have expressed concern about the implications of this dual-budget system. Ayo Teriba, CEO of Economic Associates, warned that repeated extensions have become habitual, reflecting inadequate funding and poor budget planning. Paul Alaje, Chief Economist at SPM Professionals, highlighted the potential inflationary impact of increased money supply due to overlapping budgets. Professor Akpan Ekpo criticized the lack of robust forecasting models and the negative effects on economic growth and investor confidence.
Dr. Muda Yusuf of the Centre For The Promotion Of Private Enterprise attributed the poor capital budget performance to unrealistic revenue assumptions and high debt servicing costs. Dr. Aliyu Ilias warned that running two capital budgets concurrently could lead to duplication and reduced transparency, undermining budget discipline.
On the other hand, Segun Kuti-George of the Nigerian Association of Small-Scale Industrialists viewed the extension positively, arguing that it allows for the completion of critical infrastructure projects from the 2024 budget alongside the implementation of the 2025 budget, which could boost economic development.