South-West States Unveil N8.7tn 2026 Budget Focused on Capital Projects and Economic Growth
The South-West states of Nigeria have proposed a combined budget of N8.7 trillion for 2026, with capital expenditure accounting for more than half of total spending, the Development Agenda for Western Nigeria (DAWN) Commission disclosed on Tuesday. The announcement came during the Commission’s 2026 Outlook event, which brought together policymakers, economists, and civil society leaders to discuss strategies for translating Nigeria’s fragile macroeconomic stability into sustained regional growth and improved citizen welfare.
At the virtual forum themed “2026 South-West Nigeria Outlook: Advancing Subnational Economic Competitiveness,” DAWN Commission Director-General Dr. Seye Oyeleye highlighted that recent macroeconomic reforms, though challenging, are gradually stabilizing Nigeria’s economy. He noted that the South-West, historically a hub of innovation and enterprise, has a critical opportunity to convert this fragile stability into productivity-driven growth, fiscal resilience, and enhanced welfare outcomes for its citizens.
Mr. Adesoji Farayibi, Head of Economic Development and Research at DAWN, outlined the regional budget breakdown, revealing that Lagos alone accounts for approximately 51% of the total allocation. Excluding Lagos, the states still demonstrate growth in internally generated revenue and an increased focus on capital projects totaling N4.54 trillion. Farayibi emphasized that external factors such as global trade shifts, AI investment, and geopolitical tensions will shape capital flows and financing conditions, stressing the need for states to diversify funding sources and strategically invest in sectors like infrastructure, energy, and transportation.
Experts at the forum also cautioned against treating budgets as mere numbers. Osun State Commissioner for Budget and Economic Planning, Professor Moruf Adeleke, stressed that recurrent spending is necessary for institutional functionality and supporting capital projects. Similarly, University of Ibadan economist Professor Abiodun Folawewo noted that the success of budgets depends on effective implementation, highlighting the need for investments in critical infrastructure, particularly power, to boost productivity across sectors.
Global Director of BudgIT, Seun Onigbinde, urged states to depoliticize budgeting, advocating for outcome-focused planning that benefits future generations. He warned that uneven development and short-term projects often limit economic impact, calling for stronger evaluation mechanisms and prioritization of initiatives that drive measurable improvements in education, healthcare, and industry. The South-West states’ 2026 budget represents a significant step toward aligning fiscal planning with long-term regional competitiveness and sustainable development.
source: punch