Making Every Naira Count: Case for Smart Public Spending
Omolabake Fasogbon
Despite rising budgets, Nigeria’s socio‑economic challenges remain persistent. Bad roads, unreliable power, overstretched hospitals, and rising personal costs continue to define everyday realities, even as reports of government spending reaches record high.
Nigeria’s federal budget rose from N21.83 trillion in 2023 to N54.99 trillion in 2025, alongside supplementary allocations each year. State budgets have equally followed the same upward trend.
Equally, Lagos State budget jumped from N1.26 trillion in 2021 to N3.37 trillion in 2025, with a massive portion earmarked for infrastructure. Yet, these increments have not translated into better living conditions for the masses.
A Development economist, Prof. Chiwuike Uba, argued the real issue is not the size of the budget, but how financing and execution are managed.
“Nigeria’s development challenge is not rooted in lack of financing, but in the governance systems that determine how resources are effectively deployed,” he said.
He insisted that Nigeria must embrace smarter financing models that prioritise results over disbursement. Fiscal discipline and intentional spending, he maintained are crucial if states want to deliver real value.
Citing the European Union’s Global Gateway Initiative, a model that combines grants, loans, and private investment to tie funds to outcomes, Uba suggested Nigeria should take a cue from it.
The initiative mobilises up to €400 billion globally by 2027, with €150 billion earmarked for Africa. Its priorities include sustainable infrastructure in energy, digital connectivity, transport, health, education, and research.
“Unlike traditional development financing programmes, Global Gateway emphasises a multi-stakeholder governance model. Public institutions, development finance institutions, private investors, and civil society organisations collaborate throughout project design, implementation, and monitoring.
“This structure is intended to strengthen transparency, ensure accountability, and guarantee that projects meet high environmental, social, and governance standards,” Uba explained.
He noted that the consequences of poor fund deployment often fall directly on the masses. For instance, when a hospital is budgeted but not built, patients pay out of pocket; when road funds are approved but unspent, commute times remain long and transport costs stay high.
He averred that a large budget without disciplined execution delivers little value.
“The implications go beyond governance; they directly affect economic opportunities. Efficient public spending reduces the cost of doing business, supports job creation, and improves income potential. Inefficient spending does the opposite, forcing individuals and businesses to operate in a high-cost environment,” he stated.
Uba referenced how global gateway model, as an example of smart financing, had supported nations in achieving their developmental goals, noting that Nigeria’s alignment with it is still at infancy stage.
“In Namibia, Global Gateway investments have mobilised approximately €1.3 billion in loans and grants to support large-scale green hydrogen and renewable energy projects, while unlocking billions more in private investment. In Central Asia, the model is financing digital infrastructure to connect remote economies. In West Africa, it is strengthening cocoa value chains and farmer incomes. In Southern Africa, roughly €2 billion is revitalising the Lobito Corridor rail network to boost regional trade,” he explained.
He said these examples demonstrate how global gateway blends public finance, private investment, and technical expertise to deliver large-scale development outcomes.
Nigeria has also tapped into this framework, with the EU investing €45 million to expand Nigeria’s digital infrastructure. Uba said this partnership offers an opportunity to mobilise large‑scale financing while aligning investments with sustainability, climate resilience, and inclusive development objectives.
“However, the effectiveness of such partnerships ultimately depends on the fiscal discipline and implementation capacity of Nigeria’s subnational governments,” he warned.
The economist further cautioned against needless borrowing, noting development challenge is not about borrowing more, but spending existing resources judiciously.
Rising debt, he noted, has not translated into proportional improvements in infrastructure or services.
“Smart financing, disciplined fiscal governance, and coordinated federal‑state partnerships will determine whether development financing translates into tangible improvements in the daily lives of Nigerian citizens,” he stated.
