...Stalled federal projects litter states as construction works grind to a halt, poverty spreads
The non release of budgetary allocations for capital projects by the Federal Ministry of Finance is threatening to cripple Nigeria’s struggling economy, particularly the construction industry, spreading poverty, Business Hallmark’s findings have revealed.
BH checks revealed that construction works at projects sites belonging to the Federal Government scattered across the 36 states of the federation and the Federal Capital Territory (FCT), Abuja, have almost ground to a halt, with construction workers either idle with no work to do, or already mobilized construction firms abandoning projects sites.
The development, sources in the industry informed our correspondent, has further compounded the raging poverty in the country as the industry, which is known for the redistribution of wealth through the supply of manual labour and construction materials like cement, granite, gravel, sand, woods, and food needed on sites is on the verge of shutting down.
The Coordinating Minister of Health and Social Welfare, Prof. Mohammed Pate, shocked the whole country in February while appearing before the House of Representatives Committee on Healthcare to defend his ministry’s 2026 budget estimates, by revealing that the ministry only received N36 million out of the N218billion appropriated for the sector in 2025 for capital vote. But his ministry was not alone; what came out of the budget defense by ministers was a catalogue of woes.
While blaming the non release of his ministry’s capital votes to cash flow constraints and systemic bottlenecks in the Federal Government’s budget execution process, the minister, the development prevented his ministry from implementing its capital budget for last year.
“Out of the N218 billion appropriated to the health sector by the parliament for the execution of capital projects in the 2025 fiscal year, only N36m was released,” Prof. Pate disclosed.
Meanwhile, checks by our correspondent at the weekend showed that the anomaly is not peculiar to the health and social welfare ministry, but also affects other federal ministries as well. In July 2025, the Minister of Finance and Coordinating of the Economy, Mr. Education, had said the revenue receipts were falling short of projections which could impact adversely the budget implementation.
Budget and Revenue Reality
However, Nigerians were shocked when President Bola Tinubu claimed in October 2025 that the budget had achieved over 70 percent revenue
All federal ministries, especially the Ministries of Education, Solid Mineral Resources and Interior, have struggled to implement their capital projects due to the paltry releases of funds by the Federal Ministry of Finance and the Office of the Accountant General of the Federation.
For instance, the Minister of Solid Minerals Development, Dr. Dele Alake, also stunned lawmakers during his appearance before them to defend his ministry’s 2026 proposal, when he disclosed that his ministry received zero capital allocation for 2025.
Meanwhile, budget documents showed that the sum of N865.06 billion was earmarked for the ministry as capital expenditure, yet it didn’t get a kobo from the government.
Also, half of the ministry of interior’s overhead budget remained unpaid as of January 31, 2026.
Budget papers seen by our correspondent indicated that while the FG and the National Assembly usually approved large capital allocations for ministries, departments and agencies (MDAs), actual cash releases have been abysmally low.
As a result, the leadership of affected ministries have primarily focused on paying workers wages, run their offices and maintain equipment from their personnel costs, which BH learnt are usually released in full.
A reliably source in the Federal Ministry of Finance told our correspondent that the failure of government to release allocated capital votes is not intentional.
According to the source, who begged for anonymity because he’s not authorized to speak on the matter, said the non disbursement of funds for capital projects for intended MDAs was caused by severe revenue shortfalls and rising debt service obligations.
Meanwhile, the development has continued to cause a major distortion in the construction industry, with stakeholders telling tales of woes and collapse of their businesses.
The owner of a building construction firm based in Lagos, Engr. Supo Benjamin, lamented that he has lost over N5 billion to the non release of capital votes to MDAs he handled projects for.
“I came back to Nigeria about 10 years ago on the advise of a close secondary school mate, who is a director in the Federal Ministry of Works.
Impact on Businesses
“He proposed I should join hand with him to set up a company to execute projects by his ministry and assured that there’s going to be constant inflow of contracts for the new company from his ministry and others.
“With my life savings in the UK, I travelled to China to buy some construction equipment like block and culvert making machines, compactors, drillers and steel door molders, which I moved to Nigeria.
“Initially, things went smoothly until about five year ago, when everything changed. From handling multiple contracts of around seven to eight at a time, I am lucky if I get one or two to do in a year today.
“The equipment I imported from China are now rotting away. My childhood director friend, who made the proposal that I should come home so that we can both set up business is now helpless.
“The contracts he gives out now are mainly maintenance jobs, which can’t pay for my equipment. I am going to be in serious debt soon if the trend didn’t abate,” Benjamin said.
He also said he had laid off over 90% of his workforce, who had become idle with nothing to do.
An iron bender, who preferred to be known as Chidi, lamented that it had been difficult to take care of his family since the trend of not getting jobs started about four years ago.
“Before now, I can be on site for two to three months without seeing my family. But I normally make sure I send enough money back home.
“But today, I stay home most of the time or go to a nearby farm to do labour works in order to get money to take care of my family,” Chidi lamented.
Also affected are suppliers of materials like sand, planks, laterite and even food vendors who normally prepare the foods served to workers.
The situation has led to a major financial strain on many Nigerian families, who depend on the construction industry for survival.
Finance Minister to Blame
Speaking on the poor capital budgetary releases to ministries, agencies and parastatals, an investment analyst, Mahmood Suleiman, blamed the development on the minister of finance and the accountant general of the federation.
Suleiman, who claimed that budget releases for overhead costs and intervention funds are 100 per cent, disclosed that capital releases so far have been about 20 per cent, even though the budget’s lifetime ends in June.
“How can we have a minister that is comfortable with about 100 per cent releases for the overhead cost and intervention funds but refused to release funding for capital project as a result of which most contractors have abandoned site? Do we expect to build a virile economy under this scenario?”
While calling for the immediate sack of the minister of finance whom he accused of failing woefully in ensuring dutiful implementation of the budget and creating bad image for the present administration, Suleiman alleged that those saddled with the responsibility of ensuring budgetary releases concentrate on areas that only benefit them, while ignoring the main capital budget which benefits all.
Suleiman also accused the accountant general of not helping matters by failing to advise against starving contractors of funds with plethora of projects abandoned.
“This non-release of funds has led to many contractors leaving construction sites. This will ultimately lead to variation and more spending by the government.
“Because contractors are not being paid, new jobs are not being commissioned. MDAs are grounded. It is only the FCT that is not on TSA that is working.
“We cannot justify the fact that two months after the expiration of the 2025 budget calendar, only 20 percent of capital release has been made.”
Suleiman said that the non-release of funds for the 2025 budget has caused many Nigerians to lose hope in the government’s ability to fund the 2026 budget.
“We are tempted to believe that the 2026 budget is not realistic. It is a mere deception and propaganda since we did not achieve more than 20 percent of the capital vote for the 2025 budget”, he said.