Reps extend 2025 capital budget execution to Sept

The Nigerian House of Representatives has approved a further extension of the 2025 capital budget execution deadline to September 30, 2026. This marks the third such extension for the capital component of the Appropriation Act, aimed at facilitating the completion of ongoing projects, addressing administrative bottlenecks, and ensuring the full utilisation of allocated funds. The move, enacted through an amendment bill, underscores persistent challenges in Nigeria's budget implementation cycle and raises questions about fiscal discipline and accountability, despite being legally permissible under the National Assembly's legislative powers.

Nigeria's fiscal landscape is once again under scrutiny following the recent decision by the House of Representatives to extend the implementation period for the capital component of the 2025 Appropriation Act. The new deadline, set for September 30, 2026, grants Ministries, Departments, and Agencies (MDAs) an additional three months to execute ongoing capital projects and fully utilise funds appropriated under the fiscal framework. This development, which saw the passage of the Appropriation (Repeal and Enactment) Act, 2025 (Amendment) (No. 2) Bill, 2026, during an emergency plenary session, highlights recurring challenges in the nation's budget cycle.

The Nigerian budgeting process is a multi-stage cycle involving preparation, submission, authorisation, execution, and audit, primarily governed by the 1999 Constitution of the Federal Republic of Nigeria (as amended) and the annual Appropriation Act. Sections 80 and 81 of the Constitution are particularly pertinent, outlining the establishment of the Consolidated Revenue Fund and mandating the President to lay estimates of revenues and expenditures before the National Assembly for appropriation. The Appropriation Act, once assented to by the President, authorises the withdrawal of funds from the Consolidated Revenue Fund for specific purposes, typically within a defined financial year, which in Nigeria aligns with the calendar year (January 1 to December 31). However, delays in budget passage and implementation have historically led to a practice of extending the lifespan of Appropriation Acts, particularly their capital components. The Public Procurement Act of 2007 also plays a crucial role, establishing the legal framework for public procurement and aiming to ensure fairness, competitiveness, efficiency, and transparency in the process, though procurement delays are frequently cited as a reason for budget execution challenges.

The latest extension of the 2025 capital budget to September 30, 2026, marks the third such adjustment, following previous extensions from December 31, 2025, to March 31, 2026, and then to June 30, 2026. The rationale provided by lawmakers, including the House Leader, Prof. Julius Ihonvbere, points to substantial unspent funds by MDAs due to administrative bottlenecks, procurement delays, and implementation challenges. The extension is intended to prevent the abandonment of critical infrastructure projects, allow for the completion of ongoing works, and facilitate the settlement of outstanding obligations. Legally, the National Assembly possesses the competence to extend Appropriation Acts. This power is derived from its legislative authority under Section 4(2) and its fiscal control under Section 80(2) of the 1999 Constitution. Judicial precedent generally defers to the legislature's exercise of these powers, provided the extension is effected through a lawful enactment and does not contravene express constitutional prohibitions. However, the frequent recourse to budget extensions, while legally permissible, has drawn criticism from civic organisations like BudgIT, which described the broader 2026 budget as ambitious and potentially unfeasible. Such extensions can undermine fiscal discipline, weaken accountability mechanisms, and delay the timely implementation of government policies. The practice also perpetuates an 'overlapping' budget cycle, where MDAs manage funds from multiple fiscal years, complicating transparency and project monitoring. While the intent is to ensure project completion, the recurring nature of these extensions suggests systemic issues within the budget planning and execution processes that require more fundamental reforms beyond mere deadline shifts.

The extension of the 2025 capital budget execution deadline to September 30, 2026, provides a temporary reprieve for MDAs to complete critical projects and utilise allocated funds. For legal practitioners, this development underscores the dynamic nature of Nigeria's fiscal legislation and the National Assembly's robust powers in budgetary matters. Attorneys advising government agencies, contractors, and other stakeholders involved in public projects must remain vigilant regarding these legislative adjustments, as they directly impact project timelines, funding availability, and contractual obligations. The continuous need for such extensions, however, signals a deeper structural challenge within Nigeria's public finance management. Moving forward, practitioners should monitor legislative efforts aimed at reforming the budget cycle to ensure greater predictability and adherence to fiscal timelines. The call for stricter adherence to the Fiscal Responsibility Act and enhanced institutional capacity for budget implementation remains crucial to fostering a more disciplined and effective budgetary system in Nigeria.