Edun links zero capital spend to financing halt of ‘ways and means’

Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, has attributed the non-release of capital funds under the 2025 budget to the Federal Government’s decision to discontinue what he described as unsustainable fiscal practices, especially the extensive use of ‘ways and means’ financing to bridge budget deficits.

Mr Edun made the disclosure when he appeared before the House of Representatives Committee on Appropriations alongside members of President Bola Ahmed Tinubu’s economic team. The session was convened to review the performance of the 2025 budget and to consider proposals for the 2026 fiscal year.

Lawmakers had pressed the economic team over what they termed the weak execution of the 2025 budget. Central to their concerns was the reported zero implementation of capital expenditure, despite prior legislative approvals and improved revenue performance during the year.

Responding to the queries, Edun said the administration deliberately moved to dismantle fiscal structures inherited from previous governments that it considered harmful to long-term economic stability. He explained that before the current administration took office, the Federal Government relied heavily on advances from the Central Bank of Nigeria (CBN) under the ‘ways and means’ window to finance substantial fiscal shortfalls.

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In addition, he said the Nigerian National Petroleum Company Limited (NNPCL) sustained the petrol subsidy regime through an under-recovery arrangement, effectively absorbing the cost differential without reflecting it transparently in the budget. According to the minister, both mechanisms created distortions in public finance management and weakened macroeconomic fundamentals over time.

Edun disclosed that the Tinubu administration halted what he described as ‘unchecked’ recourse to ways and means financing, which he said had accumulated to about N30 trillion. The move, he explained, was part of broader efforts to correct fiscal imbalances and transition to more market-based and transparent funding arrangements.

He argued that discontinuing the practice was necessary to restore macroeconomic stability, rein in inflationary pressures and rebuild investor confidence in Nigeria’s economy. However, he acknowledged that the abrupt shift away from central bank deficit financing created a funding gap that affected the timely release of capital allocations under the 2025 budget.

According to him, while the reforms were painful in the short term, they were essential to prevent further deterioration of fiscal sustainability, adding that more detailed explanations regarding the zero capital performance would be provided by the minister of state for finance.

Earlier in the session, Chairman of the House Committee on Appropriations, Mr Abubakar Bichi, said available data showed that total revenue for 2025 rose to approximately N28 trillion, surpassing the N25 trillion target approved in the budget. He noted that the improved revenue performance made the non-implementation of capital projects more difficult for lawmakers to understand.

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Mr Bichi also reminded the economic team that the National Assembly had approved an executive request for N1.15 trillion to finance specific components of the 2025 capital budget. Given that legislative backing and higher revenue outturns were in place, he questioned why capital releases remained at zero.

He stated that the interface with the economic managers was aimed at scrutinising the weak budget execution record for 2025 and assessing the credibility of the projections and assumptions underpinning the 2026 fiscal proposals.

Meanwhile, Minister of Budget and National Planning, Atiku Bagudu, told lawmakers that consultations between the executive and the National Assembly had led to an agreement to roll over 70 percent of the 2025 capital allocation into the 2026 fiscal framework.

Bagudu explained that the rollover arrangement was intended to preserve key projects and ensure continuity, given the constraints experienced during the current fiscal year. He added that steps were being taken to enhance funding coordination and improve implementation rates in 2026.

On the outlook for next year, Bagudu assured the committee that the administration was working to strengthen execution mechanisms, align spending with available resources and avoid a repeat of the bottlenecks that characterised the 2025 capital budget performance.