FG budgets nearly N1tn for empowerment, SUVs amid rising borrowing pressure

Make PUNCH part of your everyday experience.Add us to your Preferred Sources FG budgets nearly N1tn for empowerment, SUVs amid rising borrowing pressure News July 27, 2026 1:07 am Sport Utility Vehicles. Photo: The Guardian By  Sami Tunji Kindly share this story: The Federal Government has earmarked N962.83bn for the procurement of Sport Utility Vehicles and empowerment projects in the 2026 Appropriation Act, an amount that exceeds the combined allocations to seven key federal ministries, according to a review of the budget by civic technology organisation, Tracka. In its analysis of the 2026 Federal Government budget, Tracka said the allocation comprised N15.13bn for the procurement of 39 SUVs and N947.70bn for 2,579 empowerment projects, bringing the total to N962.83bn. The civic organisation noted that the amount surpassed the combined N960.27bn appropriated to the Federal Ministries of Industry, Trade and Investment; Housing and Urban Development; Women Affairs; Justice; Livestock Development; Aviation and Aerospace Development; and Petroleum Resources. According to the group, the Ministry of Industry, Trade and Investment received N156.8bn in the 2026 budget, Housing N145.3bn, Women Affairs N169.39bn, Justice N150.7bn, Livestock Development N177.6bn, Aviation and Aerospace Development N87.3bn, while Petroleum Resources was allocated N73.1bn. Tracka expressed concern over what it described as a lack of transparency surrounding many of the empowerment projects. It stated, “Yet, only 70 of the 2,579 empowerment projects have clearly identified implementation locations.” The organisation argued that the omission raised fundamental accountability questions regarding project implementation and oversight. It asked, “How can citizens track projects with no stated location? How can oversight institutions verify implementation? How can taxpayers know who ultimately benefits from these allocations?” Beyond the absence of project locations, Tracka said the projects were spread across 184 implementing agencies, including several institutions whose statutory mandates do not ordinarily cover empowerment programmes. According to its findings, the Federal Cooperative College, Oji River, was assigned 393 projects worth N127.1bn, while the National Agricultural Development Fund was allocated six projects valued at N89.5bn. The Federal College of Horticulture, Dadin-Kowa, Gombe, received 216 projects worth N88.1bn, while the Federal Cooperative College, Ibadan, was assigned 94 projects valued at N36.9bn. A review of the budget document based on Tracka’s analysis shows that the largest single empowerment allocation was N89.09bn for the Renewed Hope Fertiliser Support Programme under the National Agricultural Development Fund. Other high-value allocations include N14bn for the procurement and distribution of economic empowerment equipment and utility vehicles through the Federal Cooperative College, Oji River, N14bn for youth empowerment programmes under the Federal Ministry of Youth Development, and another N14bn for youth empowerment and medical outreach under the Ministry of Humanitarian Affairs and Poverty Alleviation. The document also contains numerous allocations for the procurement of buses, tricycles, motorcycles, electric vehicles, sewing machines, fertilisers, vocational equipment, grants and other empowerment items across different agencies and regions. While stressing that empowerment initiatives are not inherently problematic, Tracka said they could produce meaningful social and economic benefits if properly designed and transparently implemented. It said, “Let us be clear, there is nothing inherently wrong with empowerment programmes! When well-designed and transparently implemented, they can improve livelihoods, create economic opportunities, and support vulnerable Nigerians.” However, it warned that experience had shown that many poorly designed programmes had become channels for political patronage. “Experience over the years has shown that many poorly defined empowerment projects have become vehicles for political patronage, rewarding loyalists rather than delivering broad-based benefits to citizens. When projects have no clear location, no transparent beneficiary selection process, and are assigned to agencies without the appropriate mandate, public confidence is eroded, and accountability becomes difficult,” the organisation stated. Tracka also linked its concerns to the Federal Government’s fiscal position, noting that the 2026 budget is expected to be financed largely through borrowing.Make PUNCH part of your everyday experience.Add us to your Preferred Sources It said, “This concern is even more pressing given that the 2026 Budget is projected to be financed with a deficit of about 46 per cent. At a time when government is borrowing heavily to fund public expenditure, every naira should be directed toward investments with clear development outcomes, measurable impact, and value for money, not opaque allocations that citizens cannot effectively track.” The organisation further called for greater transparency in future budget preparation and implementation. According to Tracka, “A budget should not only allocate resources, it should also inspire public confidence. Every budget item should have a clear purpose, a defined location, an implementing agency with the legal mandate to deliver it, identifiable beneficiaries, and measurable outcomes.” The PUNCH earlier reported that the Federal Government increased its borrowing plan for 2026 to N29.20tn following an expansion in the proposed budget size. The figure was an increase of N11.31tn when compared with the earlier N17.89tn borrowing projection contained in the 2026 Abridged Budget Call Circular issued by the Federal Ministry of Budget and Economic Planning. Findings by The PUNCH showed that total debt financing for 2026 is now put at N29.2tn, reflecting a sharp upward revision as expenditure rises significantly beyond earlier projections. The expansion is driven by a widening fiscal deficit, with total spending estimated at N68.32tn and aggregate revenues projected at N36.87tn, leaving a deficit of N31.46tn. The PUNCH also reported that the Federal Government raised N5.08tn from the domestic bond market in the first six months of 2026, marking a 77.8 per cent increase from the N2.86tn raised during the corresponding period of 2025, according to an analysis of Debt Management Office auction results. The Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, earlier said Nigeria must be cautious not to destroy the fragile stability achieved in recent months. He warned that high deficits and rising debt levels pose a serious threat. Yusuf said he was worried about what he described as the risk of a debt trap, stating that “we need to worry about debt sustainability” because “high levels of deficits and high levels of debt… can choke the fiscal space and lead to a kind of vicious circle of debt.” He explained that Nigeria has only recently regained some macroeconomic footing and that any disruption could quickly worsen inflation and exchange rate pressures. According to him, “we already have a reasonable level of macroeconomic stability” and “once we lose that recovery… it will create even more problems because that is where the problem of inflationary pressure will come and that is where the pressure on the exchange rate will come.” Yusuf said the government had claimed that revenue performance was improving and urged it to capitalise on these gains to cut the deficit rather than expand it. He argued that Nigeria must “leverage on the improved revenue situation to moderate the level of deficit and the level of debt exposure so that we don’t put at risk the macroeconomic stability that we have achieved.” Former Vice President and African Democratic Congress presidential candidate, Atiku Abubakar, has challenged the Federal Government to explain what he described as an estimated N7.98tn oil revenue windfall, questioning why the administration continues to embark on massive domestic borrowing despite benefiting from crude oil prices far above the 2026 budget benchmark. Related News Reforms boosting oil sector investments, says Shettima Oyo assembly passes N210bn supplementary budget BPP unveils reform to digitalise, modernise public procurement Atiku, in a statement issued on Sunday by his Senior Special Assistant on Public Communication, Phrank Shaibu, accused the Tinubu-led government of operating without fiscal transparency and discipline, insisting that Nigerians deserve a full account of revenues generated from higher international oil prices. The former Vice President said the Federal Government had already raised about N5tn from the domestic bond market in the first half of 2026. According to him, such aggressive borrowing would ordinarily be expected only when government revenues had fallen sharply. “Nigerians deserve a full accounting of this windfall. Where has the money gone? Why is there no transparent disclosure of the proceeds from excess crude sales? Why is government borrowing heavily when oil revenues are significantly above budget projections?” the statement added. Former Deputy National Publicity Secretary of the All Progressives Congress, Timi Frank, recently expressed concern over the controversy surrounding the 2026 federal budget, calling for greater transparency, accountability and stronger oversight in the management of public funds. In a statement, Frank said the ongoing public debate over the budget had heightened scrutiny of government spending and underscored the need for institutions responsible for public financial management to uphold the principles of openness and accountability. He urged the Federal Government to strengthen accountability mechanisms to restore public confidence in governance and ensure that public resources are managed prudently. “The recent revelations and controversy surrounding the 2026 Federal Budget have further reinforced the widespread perception that this administration represents one of the most troubling governments in Nigeria’s recent history,” he said. Frank added that allegations of inflated budgetary provisions and questionable expenditures had raised fresh concerns about the credibility of the budgeting process. “Allegations of inflated budgetary allocations, fictitious projects and questionable expenditures have once again raised serious concerns about transparency, accountability and the stewardship of public resources,” he added. The former APC spokesman also called on the National Assembly to discharge its constitutional responsibility of scrutinising government expenditure and providing effective oversight of the executive arm of government. Economists question allocation Commenting, a Professor of Economics at Olabisi Onabanjo University, Ago-Iwoye, Sheriffdeen Tella, cautioned that empowerment spending should be structured to strengthen domestic production rather than increase imports. In an interview with The PUNCH on Sunday, Tella said spending public funds on imported vehicles and empowerment items would limit the economic benefits to Nigeria, particularly at a time when the government was relying heavily on borrowing to finance its budget. While noting that empowerment programmes could support livelihoods, Tella argued that the government should prioritise locally manufactured goods to ensure the spending stimulates domestic economic activity. “Any empowerment should be based on what we produce here. Spending empowerment money to import things simply means that the money is not here, it is not being used here, and it cannot have much positive impact on our economy,” he said. He urged the government to scrutinise the import content of empowerment programmes, warning that a significant proportion of the allocations could ultimately finance production and employment outside Nigeria. Tella added that since part of the government’s expenditure was funded through loans, the authorities should ensure borrowed funds were used to support domestic industries. According to him, directing empowerment funds towards locally produced goods would create jobs, increase incomes and retain more value within the Nigerian economy. Also commenting, a Lagos-based economist, Adewale Abimbola, said the spending pattern reflected poor fiscal prioritisation and could undermine confidence in the government’s management of public finances. In an interview with The PUNCH, Abimbola said allocating nearly N1tn to SUVs and empowerment programmes while relying heavily on borrowing sent the wrong signal to investors, lenders and development partners. “It shows a lack of prioritisation on the part of the Federal Government. It paints the Federal Government as a poor manager of financial resources,” he said. While acknowledging that both empowerment programmes and long-term investments were important, he argued that infrastructure and human capital development offered greater prospects for sustainable economic growth. “Investment in infrastructure and human capital development is a boon for sustainable development. However, I have reservations about government empowerment programmes because they have not proven to be effective and there have been accounts of mismanagement around these funds,” he said. Abimbola urged the government to ensure that such interventions reached genuinely vulnerable Nigerians rather than becoming avenues for waste and abuse. “Government needs to be intentional to ensure these programmes reach the actual vulnerable population segment,” he added. He noted that well-designed empowerment programmes could provide temporary relief and potentially support economic growth, but only if they were effectively implemented. According to him, “A properly planned and implemented empowerment programme acts as temporary relief and could potentially stimulate economic growth. However, the impact is contingent on several factors, including whether support reaches those who truly need it, whether the funds are properly utilised, and whether beneficiaries receive capital, tools and technical support to become self-dependent. For empowerment programmes to catalyse growth, it is not only about capital.” On the assignment of projects to agencies without clear statutory mandates, Abimbola said the practice weakened confidence in the budget process. He also called for stronger accountability measures to improve transparency in constituency and empowerment projects. Sami Tunji Sami Tunji is a Senior Business Correspondent at Punch Newspapers with about five years of experience in data-driven reporting. He covers finance, ICT, and broader macroeconomic issues, combining analytical insight with clear storytelling. Sami’s work reflects strong editorial judgment, professional development, and a commitment to accurate and informative business journalism. Kindly share this story: All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express written permission from PUNCH. 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