Nigeria's public finance system rests on a simple principle: each financial year should be governed by a single approved Appropriation Act. Yet recent fiscal developments have seen elements of the 2025 Federal Budget continue to run alongside the 2026 Appropriation Act, particularly for ongoing capital projects whose implementation periods were extended through legislative action.
These extensions were designed to prevent the abandonment of critical infrastructure. Even so, they have provoked an important policy question: does the concurrent implementation of appropriations breach Nigeria's fiscal laws, or is it a lawful mechanism for ensuring continuity in public expenditure?
Understanding Budget Overlap
Budget overlap does not mean that Nigeria is operating two independent annual budgets for the same fiscal year. It refers, rather, to circumstances in which expenditure authorised under a previous Appropriation Act continues after a new Act has come into force — usually because certain capital projects remain incomplete and the National Assembly has authorised an extension or re-enactment.
The policy objective is understandable. Halting funding abruptly could inflate project costs, delay delivery, expose government to contractual claims, and leave strategic infrastructure unfinished. Nevertheless, repeated extensions raise legitimate questions about fiscal discipline, budget credibility, and the effectiveness of annual budget planning.
Is Nigeria Breaking the Law?
The answer is not straightforward.
Sections 80 and 81 of the Constitution of the Federal Republic of Nigeria, 1999 (as amended) require that public expenditure be authorised by law through the appropriation process. Where the National Assembly validly passes legislation extending, repealing and re-enacting, or otherwise authorising continued appropriations, the expenditure itself carries legislative backing.
Constitutional validity, however, should not be confused with full statutory compliance. A clear distinction must be drawn between the legality of a legislative extension and the administrative execution of that extension. The National Assembly may lawfully authorise continued spending, but implementation must still comply with the Fiscal Responsibility Act 2007, the Public Procurement Act, Treasury Rules, and other public financial management requirements. Delays in statutory reporting, weak procurement controls, or poor cash management may therefore constitute regulatory or administrative non-compliance even where the appropriation itself is lawful.
The more appropriate question, then, is not simply "Are overlapping budgets legal?" but rather: "Is the process of implementing those budgets consistent with Nigeria's constitutional and fiscal governance framework?"
Economic and Financial Implications
Although overlapping budgets are designed to sustain government projects, they introduce significant fiscal challenges of their own.
Reduced fiscal transparency. When appropriations from different budget cycles run concurrently, it becomes harder to distinguish the expenditure attributable to each fiscal year. This complicates budget monitoring, financial reporting, and public accountability.
Cash flow pressure. Treasury managers must finance obligations from multiple budget cycles out of a common revenue pool, increasing pressure on cash management and potentially delaying releases for newly approved projects.
Delayed capital project execution. Resources committed to legacy projects may crowd out funding for new infrastructure, slowing implementation and raising overall costs through inflation, exchange rate movements, and contract variations.
Higher fiscal and debt risks. Where expenditure commitments outpace revenue performance, government may lean more heavily on borrowing. Over time, this raises debt servicing obligations and narrows fiscal flexibility.
Weakened investor confidence. Investors and development partners favour predictable, transparent budgeting. Frequent departures from the annual budget cycle create uncertainty around fiscal planning and expenditure priorities.
At the same time, the benefits are real. Properly managed extensions can prevent project abandonment, preserve public investment, reduce contractual disputes, and improve completion rates for strategic infrastructure.
The Institutions That Matter
Managing public finances is a shared constitutional responsibility, and several institutions sit at the heart of it.
The President provides fiscal leadership by presenting the Appropriation Bill and directing its implementation once approved.
The Federal Ministry of Budget and Economic Planning and the Budget Office of the Federation prepare macroeconomic assumptions, coordinate budget estimates, monitor implementation, and evaluate budget performance.
The Federal Ministry of Finance provides fiscal policy leadership, manages government finances, and oversees expenditure control.
The National Assembly exercises the constitutional power of appropriation — scrutinising, amending where necessary, approving, and overseeing implementation of the budget.
The Office of the Accountant-General of the Federation manages treasury operations, government accounts, and expenditure controls, while the Office of the Auditor-General for the Federation independently audits public expenditure and reports to the National Assembly.
Other institutions — including the Fiscal Responsibility Commission, the Debt Management Office, the Bureau of Public Procurement, the Federal Inland Revenue Service, and the Nigeria Customs Service — play equally important roles in promoting fiscal discipline, mobilising revenue, managing public debt, ensuring procurement compliance, and safeguarding transparency throughout the budget cycle.
The Way Forward
Budget overlap should remain the exception, never a recurring feature of Nigeria's public finance system. To strengthen fiscal governance, policymakers should:
- limit budget extensions to exceptional, project-specific circumstances;
- publish statutory budget implementation reports on time;
- strengthen cash-backed expenditure controls;
- improve coordination between the Executive and the National Assembly to ensure timely budget approval; and
- return progressively to a predictable annual budget cycle aligned with the Medium-Term Expenditure Framework.
Conclusion
The debate over overlapping budgets is not simply about legality — it is about the quality of fiscal governance. Where authorised by law, the concurrent implementation of appropriations may be constitutionally defensible. But long-term fiscal sustainability depends on more than legislative approval: it requires transparency, timely reporting, disciplined execution, effective institutional oversight, and fidelity to the principles of sound public financial management.
Ultimately, Nigeria's fiscal credibility will be measured not only by the budgets it approves, but by the discipline, accountability, and efficiency with which those budgets are implemented.