2023: Only 12.5% of Nigeria’s Defence Budget is Capital, Lowest in Eight Years

The growing insecurity is seen posing as an existential risk to Africa’s biggest economy.

Africa’s biggest economy is struggling with rising kidnapping, killings and social disorder defacing the country’s investment outlook. The country attracted Foreign Direct Investment (FDI) inflow of $698 million in 2021, the lowest since 2005.

Although the level of violence fluctuates, workers have been kidnapped and pipelines blown up or illegally tapped to siphon off oil for years, costing billions of dollars in revenues.

But the situation could get much worse.

A Dataphyte report had earlier noted that Nigeria’s allocation to the Ministry of Defence has been heavily recurrent (that is used for paying salaries, allowances and other personnel costs), with a smaller portion of the budget spent on Capital expenditures.

Capital expenditures are those that could be used by the Defence ministry to purchase equipment and other infrastructures needed by it.

This trend of capital expenditure taking a small portion of total expenditure is expected to continue as only 12.5percent of the total ministry expenditure is dedicated to capital needs. 

The lesser the capital expenditure as a percentage of total expenditure, the lesser the availability of funds to purchase equipments and other capital needs for the Nigerian Defence.

This will be the lowest expenditure in eight years, starting from 2016 to 2023.

Between 2016 and 2023, it would mean that the capital expenditure as a percentage of the total expenditure of the Defence ministry dropped by 17percent.

This development of higher recurrent expenditure and very less budgeted capital expenditure cuts also across other Ministries, (aside from the Defence Ministry) involved in the Nigerian security sector.

Already, Nigeria ranks 143 of the 163 countries ranked in the global peace index for 2022.

Experts had expressed concerns on the capital expenditure of the country for its defence unit, noting that there is a need for the country to prioritise capital spendings. 

Experts also told Dataphyte that despite the high recurrent expenditures there is still the issue of welfare of the military workers, raising questions on accountability of the high recurrent expenditures, noting that the National Assembly should pay attention to the Military spending.