Nigeria’s governments spend trillions yearly, yet citizens see little change. As this article (part 2 of 5)reveals, most of that money goes into running the government — not developing the nation. From Abuja to the states, the imbalance between capital and recurrent spending exposes a governance culture built on consumption, not progress.
By Nurudeen O. Alimi
If budgets were mirrors, Nigeria’s would show a country obsessed with maintaining itself rather than developing itself.
Each year, governments at all levels announce record-breaking budgets, laced with promises of roads, schools, hospitals, and reforms. But when the numbers are stripped bare, most of that money goes to keeping government comfortable, not making citizens productive.
In 2024 alone, federal and state governments collectively spent over ₦20 trillion, yet the potholes deepened, classrooms decayed, and public hospitals gasped for life. What we call “governance” has increasingly become the art of spending much and achieving little.
The Federal Picture: Big on Overheads, Small on Impact
The Federal Government’s 2024 budget was the largest in history — ₦28.7 trillion. But the structure told an old story: ₦8.7 trillion for capital projects and a staggering ₦17 trillion for recurrent expenditure — salaries, allowances, maintenance, and administrative costs.
That means 60 percent of the budget went into consumption, not construction.
For every ₦10 Abuja spends, roughly ₦6 funds the system, and only ₦4 reaches projects meant to lift citizens’ lives.
This imbalance is not new. Nigeria’s recurrent expenditure has averaged between 68 and 75 percent of the federal budget for over a decade. What’s new is that even with more money from FAAC and the FX windfall, efficiency has not improved — only spending appetite has.
The States: Rich Budgets, Lean Results
The BudgIT State of the States 2025 Report paints a sobering picture of how states spend. Across the federation, most state governments channel between 65% and 85% of their annual budgets into recurrent costs.
In plain terms, they spend more money paying themselves than building for the people.
A few examples tell the story:
This imbalance means that while FAAC and IGR continue to rise, the portion that touches citizens’ lives keeps shrinking. Salaries are paid, offices are renovated, but schools, hospitals, and roads remain in limbo.
When Bureaucracy Eats Development
Recurrent expenditure is not bad in itself — teachers must be paid, nurses deserve salaries, and civil servants are essential. But when recurrent spending dwarfs capital investment, governance becomes self-serving.
Nigeria’s civil service now consumes the bulk of what it earns, leaving little for growth. Many states spend more on “travel and training” than on agricultural inputs or small-business loans.
Governments at all levels seem trapped in a cycle of maintenance without modernization — keeping old structures alive instead of building new ones.
Who Spends Wisely — and Who Spends Wastefully
BudgIT’s data classifies Nigeria’s states by how efficiently they convert spending into value.
High Fiscal Efficiency (Capital ≥ 45% of Total Spending):
Lagos, Anambra, Kwara, Abia, Ogun, Edo, Nasarawa, Ekiti
These states maintain healthier balance sheets and spend more on projects that outlast administrations — roads, schools, renewable energy, and small industries.
They spend to grow, not just to govern.
Moderate Fiscal Efficiency (Capital 30–45% of Spending):
Oyo, Ondo, Delta, Bayelsa, Akwa Ibom, Enugu, Kaduna, Osun, Cross River, Plateau, Benue
These states have the means but remain inconsistent. Some have ambitious budgets but poor execution; others prioritise prestige projects over real development.
They spend to be seen, not necessarily to sustain.
Low Fiscal Efficiency (Capital ≤ 30% of Spending):
Kogi, Katsina, Zamfara, Jigawa, Taraba, Yobe, Gombe, Sokoto, Niger, Kebbi, Borno, Adamawa
These states spend heavily on salaries and administration, leaving capital projects to donor agencies or federal intervention.
They spend to survive, not to serve.
The Real Cost of Poor Spending Priorities
Every naira misallocated to bureaucracy is a road not built, a classroom not repaired, a clinic not equipped.
When recurrent spending eats capital investment, citizens lose twice — first to poor services, then to rising debt. That’s because many states now borrow to build, since their internally generated revenues can barely cover salaries.
This fiscal behaviour has turned many governments into payroll machines, not development engines.
The Capital-to-Recurrent Ratio: A Governance Mirror
One of the simplest ways to measure fiscal responsibility is the Capital-to-Recurrent Ratio (CRR) — how much a government spends building versus maintaining.
A ratio of 1:1 (equal capital and recurrent) indicates healthy balance. Anything below 0.5:1 signal inefficiency.
By this measure, only a handful of Nigerian states — notably Lagos, Anambra, and Kwara — show true developmental intent.
The Federal Government, despite its size, scores poorly with a ratio of 0.51:1, barely investing half of what it consumes.
If government were a household, this would mean eating more than one earns — and borrowing for everything else.
When Money Moves but Progress Stands Still
The tragedy of Nigeria’s fiscal behaviour is not lack of funds, but lack of discipline.
Whether at the federal or state level, we have mistaken spending for governance and payroll for progress.
If budgets were judged by their impact on citizens rather than their size, half of Nigeria’s states would fail.
The Way Forward: Building, Not Maintaining
To shift from consumption to construction, three principles must guide fiscal policy:
Public salaries and allowances must grow only in proportion to internally generated revenue, not federal allocation.
Each tier of government should disclose not just how much is budgeted, but how much is completed — kilometre by kilometre, hospital by hospital.
States that sustain high capital-to-recurrent ratios should receive preferential access to infrastructure loans or grants.
Final Reflection
Nigeria’s fiscal story reveals a painful truth: we are a nation that spends more maintaining government than developing society.
Until we learn to prioritise productivity over bureaucracy and capital investment over convenience, no amount of revenue will build the future we desire.
The real question is no longer how much we earn — Last article already answered that.
The question now is how wisely we spend it.
Because nations don’t fail from poverty of income; they fail from poverty of purpose.
