Budget execution is often reported in headline percentages, but the real story lies beneath. Official data and independent analyses show that overall figures can mask significant differences between types of expenditure and across sectors, differences that ultimately shape how policy and development outcomes unfold over the fiscal year.
In 2024, recurrent spending, such as salaries and operational costs, was nearly fully absorbed across most ministries and states. Capital expenditure, which finances infrastructure and long-term projects, frequently lagged.
According to a report from BusinessDay, in the Federal Ministry of Works, Housing and Urban Development, overall execution was 59.13%, with personnel costs almost fully spent at 99.59%, and capital delivery at just over 57.2% of its allocation. In the power sector, capital execution reached approximately 5.21%, while recurrent costs remained stable. Other sectors, including aviation and environment, displayed similar patterns of higher recurrent utilisation alongside lower capital spending, which can affect the pace of infrastructure and sector development.
These patterns are also evident at the subnational level. According to BudgIT’s State of States analysis, only a handful of states implemented more than 80% of their health budgets in 2024, with average state budget performance at 60.7%. This demonstrates how execution outcomes vary across tiers of government.
While recurrent expenditure keeps institutions operational, capital expenditure drives sustainable development. It is the backbone of national transformation; funding infrastructure, enabling service delivery, and creating the conditions for economic growth. Without sufficient focus on capital spending, the impact of the budget on citizens and the economy is limited, regardless of headline execution figures.
For 2026, these insights underline the importance of early alignment between budget plans and execution capacity. Institutions that prioritise capital spending, anticipate bottlenecks, and monitor performance in real time increase the likelihood that resources translate into tangible results.
Effective fiscal execution is not just about absorbing funds; it is about ensuring that investments today deliver the infrastructure, services, and outcomes that shape the nation’s future.
By combining evidence-based analysis with strategic insights, we help organisations anticipate challenges, optimise resource allocation, and strengthen execution capacity across sectors.
