Capital expenditure by Nigerian state governments recorded a major decline in the first quarter of 2026 as political activities ahead of the 2027 general elections gained momentum.
An analysis of financial reports released by 26 state governments showed that combined capital spending dropped from N3.79 trillion in the fourth quarter of 2025 to N1.59 trillion in the first quarter of 2026.
The figures represent a decline of N2.20 trillion, equivalent to 58.1 percent.
The sharp drop has raised concerns among economic analysts and development experts who fear that slowing infrastructure investment could affect economic growth, job creation and public welfare across the country.
Capital expenditure refers to government spending on long-term development projects such as roads, schools, hospitals, electricity, housing and transportation systems.
Political Activities Linked to Spending Decline
Experts believe the reduction in spending may be connected to rising political activities ahead of the 2027 elections.
As political alignments and campaigns begin to take shape, many state governments are reportedly shifting focus toward recurrent expenses and political strategies rather than infrastructure projects.
Several analysts also linked the decline to rising debt obligations, procurement delays and increasing fiscal pressure on state governments.
Despite receiving higher allocations from the Federation Account Allocation Committee, many states reduced spending on developmental projects during the period under review.
Lagos Maintains Highest Spending
Lagos State remained the highest spender on capital projects despite recording a decline.
The state spent N340.76 billion in the first quarter of 2026 compared to N535.46 billion in the previous quarter.
Oyo State emerged as the only major exception among the states reviewed.
The state increased its capital expenditure from N105.35 billion to N231.27 billion, representing a growth of 119.5 percent.
Analysts linked the increase to the state’s aggressive infrastructure push and borrowing activities.
Several States Record Sharp Declines
Many states recorded significant cuts in capital expenditure.
Akwa Ibom reduced spending from N428.64 billion to N137.39 billion, while Bayelsa dropped from N384.81 billion to N77.51 billion.
Enugu recorded one of the biggest declines after capital spending fell by over 91 percent.
Other states including Kaduna, Katsina, Benue, Cross River, Ondo and Zamfara also posted major reductions in infrastructure spending.
States Continue Borrowing Despite Lower Spending
The report also showed that several states continued to borrow heavily despite reducing capital expenditure.
A total of N361.98 billion was borrowed by 13 states during the first quarter of 2026.
Oyo State recorded the highest borrowing figure at N164.88 billion.
Economic experts warned that rising debt without strong revenue growth could create long-term fiscal challenges for state governments.
Experts Raise Concerns
Economists warned that lower infrastructure spending could slow economic development and reduce job opportunities across Nigeria.
They also stressed that states need to improve internally generated revenue and ensure that borrowed funds are invested in productive projects that benefit residents.
Some analysts, however, argued that capital projects usually record slower spending during the early months of the year because procurement and approval processes often take longer.
The sharp decline in capital expenditure across Nigerian states highlights growing concerns about governance priorities as the 2027 elections approach.
While some states continue to invest in infrastructure, many others appear to be slowing development spending amid rising political tension, debt pressures and economic uncertainty.
Observers say the coming months will determine whether states can balance political interests with the urgent need for infrastructure and economic growth.
