MDAs Defy Federal Freeze to Smuggle N3.5tn in New Projects

An analysis of the proposed 2026 Appropriation Bill shows that at least ₦3.50 trillion worth of new projects have been introduced into the budget, despite earlier guidelines directing Ministries, Departments and Agencies (MDAs) to prioritise ongoing projects.

This development comes in spite of budget preparation instructions that required MDAs to roll over 70 per cent of their 2025 capital allocations into 2026 and largely avoid introducing fresh capital projects.

Data extracted from the 2026 budget estimates indicate that new projects within MDAs alone amount to ₦844.49 billion, while the figure rises sharply to ₦3.50 trillion when Service-Wide Votes (SWVs) are included.

Out of the proposed ₦23.21 trillion capital expenditure for 2026, the new project component represents 15.09 per cent of total capital spending.

A closer look reveals that Service-Wide Votes account for ₦2.66 trillion of the new project total, underscoring the concentration of major allocations outside traditional ministerial capital budgets.

Budget guidelines vs reality

In December 2025, the Federal Government directed MDAs to carry forward 70 per cent of their 2025 capital allocations into the 2026 fiscal year, as part of efforts to complete ongoing projects and manage spending pressures amid weak revenue performance.

The directive, contained in the 2026 Abridged Budget Call Circular issued by the Federal Ministry of Budget and Economic Planning, emphasised that MDAs should focus on existing commitments aligned with national priorities, including security, the economy, education, health, agriculture, infrastructure, power and energy, as well as social safety nets and youth and women empowerment.

The circular explicitly warned against introducing fresh projects, stressing that all proposed expenditures would undergo strict scrutiny to ensure value for money.

Despite this, budget estimates show that at least 82 MDAs included new capital or programme items in their submissions. In total, more than 400 new project lines appear across the budget, ranging from large-scale infrastructure and health investments to smaller constituency-level interventions such as boreholes, training programmes and equipment supplies.

Service-Wide Votes dominate new projects

The review of Service-Wide Votes reveals 18 new projects in the 2026 budget, with a significant share linked to financing arrangements, security-related spending, liabilities and centrally managed initiatives.

The single largest allocation is ₦1.70 trillion for outstanding contractors’ liabilities from 2024, accounting for 48.55 per cent of the total value of new projects, including SWVs.

Other notable SWV provisions include:

• ₦300 billion combined for the Nigeria Development Finance Corporation, the Economic Transformation Finance Programme and the Nigeria Growth Investment Fund;

• ₦20 billion for capitalisation of INFRACO;

• ₦30 billion for special operations funding for the Department of State Services;

• ₦110.31 billion for the Nigerian Air Force to settle outstanding obligations on T-129 ATAK and Mi-35 helicopters;

• ₦283.85 billion for presidential air fleet logistics and management, including National Forest Guard operations.

The budget also makes provision for ₦41.12 billion in recurrent take-off grants for new MDAs and ₦19.50 billion in capital take-off grants for 12 newly established MDAs, mainly in the health and education sectors, alongside other service-wide obligations such as pension adjustments and gratuity payments.

MDAs with highest new project values

At the MDA level, the five institutions with the largest value of new projects are:

• Budget Office of the Federation

• Federal Ministry of Transport (Headquarters)

• National Library of Nigeria

• National Blood Service Commission

• Sokoto Rima River Basin Development Authority

The Budget Office of the Federation leads with a ₦375 billion provision for a multilateral or bilateral tied loan under the Power Sector Recovery Operation. This single item represents 44.41 per cent of total MDA-level new projects and 10.71 per cent of the overall new project portfolio.

The Federal Ministry of Transport follows with ₦210.53 billion, covering consultancy services for major railway projects and the construction of six national bus terminals across the geopolitical zones.

The National Library of Nigeria has ₦24 billion earmarked for structural renovation and space upgrades nationwide, while the National Blood Service Commission received ₦15 billion for a national blood service centre in Abuja and rehabilitation of state offices.

The Sokoto Rima River Basin Development Authority posted ₦9.14 billion in new projects, including solar mini-grids, rural roads, water supply systems, irrigation equipment and youth empowerment schemes.

Other notable allocations

Further analysis shows:

• ₦5.85 billion for vehicle purchases across MDAs;

• ₦2.93 billion for furnishing and office equipment;

• ₦29.88 billion for renovation and refurbishment projects;

• ₦25.29 billion for residential and staff accommodation, largely driven by Defence Headquarters and DSS housing projects.

A recurring pattern

This is not the first time the Federal Government has attempted to limit the introduction of new projects in the national budget.

In the 2024 Budget Call Circular, MDAs were similarly instructed to exclude new projects from the 2025 capital budget unless sufficient funding had been provided to complete existing ones. The document clearly stated that the priority was completing ongoing projects rather than initiating new ones.

Despite these repeated directives, MDAs continue to introduce fresh projects, often with little visible resistance from oversight institutions.

Experts raise concerns

Economic experts have attributed the situation partly to late budget submissions, which limit the National Assembly’s ability to conduct detailed scrutiny.

The President of the Nigerian Economic Society, Professor Adeola Adenikinju, has argued that delayed budget presentations undermine predictability and prevent thorough analysis and defence of proposals.

Development economist and Chief Executive of CSA Advisory, Dr Aliyu Ilias, described the trend as evidence of weak fiscal discipline, suggesting that both the executive and the legislature share responsibility.

According to him, poor oversight by the National Assembly has allowed inefficiencies to persist, creating a budgetary environment where spending controls are routinely ignored.