State governors have announced plans to allocate ₦17.51 trillion for capital projects in 2025 to tackle infrastructure deficits. This marks a 54.39% increase from the ₦11.34 trillion allocated in 2024, although states faced a ₦3.98 trillion funding shortfall last year.
In total, governors aim to spend ₦28.85 trillion on infrastructure upgrades over two years, leveraging increased revenue from the Federation Account Allocation Committee (FAAC), which rose by 49.24% to ₦15.12 trillion in 2024. States received ₦5.22 trillion, representing 34.5% of the total allocation.
However, despite the increased funding, many states struggled to meet their capital expenditure targets. Only nine states, including Delta, Ekiti, Edo, Lagos, Rivers, Yobe, Osun, Bauchi, and Akwa Ibom, achieved over 80% implementation. Fifteen states met between 50% and 76%, while eight fell below 50%.
Lagos State led the pack, spending ₦1.31 trillion of its ₦1.53 trillion capital budget, achieving an 85.5% implementation rate. Akwa Ibom followed closely with an 84.4% execution rate, spending ₦483.88 billion of its ₦573.32 billion budget. Abia State, on the other hand, spent ₦250.47 billion out of ₦474.29 billion, representing 52.8%.
For 2025, Lagos plans to allocate ₦2.07 trillion for infrastructure, while Delta earmarked ₦630.46 billion. Other notable allocations include ₦611.67 billion for Abia, ₦655 billion for Akwa Ibom, ₦348.96 billion for Adamawa, and ₦467 billion for Anambra.
Experts warn that states’ heavy reliance on FAAC transfers and limited Internally Generated Revenue (IGR) could hinder project execution. Rising inflation and minimum wage increases are also straining state finances. With only 60% of budgeted capital expenditure executed on average, funding and implementation challenges remain significant hurdles.
Citizens are hopeful that the increased allocations will address critical infrastructure needs and boost economic development. However, effective management and improved revenue generation will be key to achieving these ambitious targets.
