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NITDA, NCC, Galaxy Backbone Face Project Freeze Under New Federal Budget Directive
A major federal directive on capital expenditure is set to reshape the execution of Nigeria’s digital transformation agenda. The Federal Government has mandated that all Ministries, Departments, and Agencies (MDAs) carry over 70% of their 2025 capital allocations into the 2026 fiscal year. Effectively, this is placing a freeze on new major projects and prioritizing the completion of existing ones.
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This policy, detailed in the 2026 Abridged Budget Call Circular, has direct and profound implications for key ICT and digital economy agencies. Regulatory and development agencies like the National Information Technology Development Agency (NITDA), the Nigerian Communications Commission (NCC), and Galaxy Backbone (GBB), potentially face delaying new digital initiatives while focusing resources on ongoing critical infrastructure.
A Strategic Shift: From New Launches to Project Completion
The circular establishes that the 2026 capital budget ceiling for any MDA will be capped at 70% of its 2025 project allocation. This means only 30% of this year’s capital budget will be released in 2025. The bulk will form the foundation of next year’s spending.
For ICT agencies, this translates to a fundamental operational shift:
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Completion Over Creation: Agencies must use the rolled-over funds primarily to finish major 2025 projects, such as ongoing data center deployments, national cybersecurity initiatives, and digital infrastructure rollouts like fibre optic expansion.
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Freeze on New Major Projects: The directive implies a significant freeze on initiating new capital-intensive digital projects in 2026. The emphasis is on deriving value from existing investments.
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Strict Alignment with National Goals: All budget proposals must demonstrably support the administration’s core priorities. They include national security, economic growth, and critical infrastructure.
“Government is trying to freeze out waste and unjustifiable expenses by MDAs that usually have no value to the overall objective of real growth,” a senior presidency official told IT Edge News in Abuja.
Implications for Key Digital Economy Pillars
The policy places specific pressures on flagship agencies driving Nigeria’s digital future:
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NITDA: May need to prioritize completing active digital skills centers, innovation hubs, and IT clearance projects over launching new nationwide programs.
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NCC: Could see a heightened focus on concluding existing broadband infrastructure projects and universal service provision initiatives rather than new regulatory tech frameworks.
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Galaxy Backbone: Will likely concentrate resources on finalizing ongoing network expansion and cloud infrastructure upgrades critical for e-government services.
The circular warned MDAs against exceeding 2025 overhead ceilings despite inflationary pressures, stating,
“We are constrained by revenue challenges… proposals that exceed approved ceilings will be adjusted downward.”
The Rationale: Fiscal Discipline and Strategic Continuity
The government cites fiscal discipline, project continuity, and strategic alignment as the policy’s core drivers. It aims to curb new spending amid weak revenues, and prevent the perennial problem of abandoned or duplicated projects,
It also wants to ensure all expenditure aligns with the Medium-Term Expenditure Framework (MTEF). Equally important, expenditures must align with the Renewed Hope Infrastructure Development Plan.
All MDAs must submit their 2026 budgets through the GIFMIS system by Tuesday, December 9, 2025. This helps in setting the stage for a year where completing and consolidating existing digital foundations takes precedence over pioneering new frontiers.
