FG Clears Over N2tn in 2024 Capital Budget Obligations, Pledges Timely 2025 Releases

By Gabriel Roseline| Akahi News

The Federal Government has settled more than N2 trillion in outstanding capital budget obligations from the 2024 fiscal year, with a firm commitment to prioritising the timely release of capital funds in 2025.

Minister of Finance and Coordinating Minister of the Economy, Wale Edun, announced the development on Thursday during a ministerial press briefing in Abuja. He also used the occasion to declare that Nigeria is “open for business” to global investors, citing improved economic stability and positive macroeconomic indicators as proof of the administration’s progress.

N2tn Paid to Contractors, Focus Shifts to 2025

Edun disclosed that in the last quarter alone, the government disbursed over N2 trillion to contractors to clear pending capital obligations from the previous year.

“In the last quarter, we did pay contractors over N2tn to settle outstanding capital budget obligations. That is from last year. At the moment, we have no pending obligations that are not being processed and financed. And the focus will now shift to 2025 capital releases,” he said.

The minister stressed that government agencies must only commit to capital projects after funds have been duly authorised, warning against entering binding commitments solely based on budget appropriations without available cash backing.

Positive Economic Indicators and Fiscal Reforms

Edun pointed to encouraging economic statistics, including a trade surplus of over $4 billion in the first quarter of 2025, a 9.8 per cent growth in exports, stable exchange rates, and foreign reserves of $39 billion as of July. He attributed these gains to the policy direction of President Bola Tinubu’s administration, which he said had created “stable macroeconomic conditions against which people can plan and invest.”

He also highlighted significant fiscal reforms, notably halting the unauthorised use of Ways and Means advances from the Central Bank. This move, coupled with GDP rebasing, has reduced the debt-to-GDP ratio from 52.1 per cent to 38.8 per cent.

“There have been no debits to Ways and Means since early in this administration,” Edun noted, adding that gross revenues in the first half of 2025 were 37.4 per cent higher than in the corresponding period of 2024.

Boost to States’ Fiscal Capacity

According to the minister, the Federal Government has also improved the fiscal position of state governments by repaying past deductions from the Federation Account. This, he said, has enabled states to strengthen capital investment.

“Since the first half of 2023, the combined fiscal balance of the states has grown from 1.8 per cent of GDP to 3.1 per cent — that is from N2.8tn to N7.1tn, which is a surplus,” Edun revealed, linking the improvement to the removal of fuel subsidies and adherence to the rule of law in settling outstanding obligations.

Comprehensive Tax Reform and Revenue Optimisation

Looking ahead, Edun announced plans to implement Nigeria’s most comprehensive tax reform from January 2026. The reform will consolidate all tax laws into a single framework, eliminate more than 50 overlapping taxes, and simplify compliance for individuals and businesses.

He further unveiled a new revenue optimisation and assurance platform leveraging technology, digitisation, and artificial intelligence to centralise collections from ministries, departments, and agencies, block leakages, and strengthen financial intelligence.

Medium-Term Economic Goals and Infrastructure Investment

The minister reaffirmed the government’s medium-term target of achieving 7 per cent annual GDP growth, with a strategy centred on investments in agriculture, education, health, manufacturing, technology, and infrastructure.

Recent efforts to attract private capital into infrastructure were highlighted, including public-private partnership arrangements for the Third Mainland Bridge and Carter Bridge in Lagos.

On the energy front, Edun said the government aims to increase power generation to 6,000 megawatts by the end of 2025 and complete the Ajaokuta-Kaduna-Kano gas pipeline to support industrial expansion.

Social Investment and Youth Empowerment

Edun disclosed that direct cash transfers to vulnerable Nigerians are ongoing, with eight million out of the targeted 15 million beneficiaries already receiving support through three rounds of payments. The process, he said, is fully transparent, using biometric verification and digital disbursement methods.

Other initiatives include the Nigeria Education Loan Fund, the Consumer Credit Scheme, the forthcoming Youth Investment Bank, and a €600 million facility for the digital and creative sectors, with a dedicated allocation for young women entrepreneurs.

“Our commitment is to build an economy that works for everyone with transparency, resilience, and purpose,” Edun concluded.

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