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‎The capital expenditure by 26 state governments have plunged by N2.19tn within three months in the first quarter of 2026,
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‎This was revealed in an analysis of quarter-on-quarter financial reports published on the official websites of the states
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‎It showed that total capital expenditure fell by N2.20tn, representing a 58.1% decline, from N3.79tn recorded in the fourth quarter of 2025 to N1.59tn in the first quarter of 2026.
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‎Similarly, a breakdown of state government expenditure between January and June 2025 showed that 31 states collectively spent N2.75tn, averaging N1.38tn on capital projects during the six-month period.
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‎The sharp contraction comes amid growing political activities and early alignments ahead of the 2027 general elections,
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‎Financial analysts have repeatedly warned that increasing debt accumulation without corresponding revenue growth may worsen fiscal sustainability challenges for subnational governments.
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‎However, state governments have argued that borrowings remain necessary to finance critical infrastructure projects and bridge funding gaps.
Edited by Favour Owonibi.