Nigeria's effort to digitalize government operations is entering a crucial test as federal ministries, departments and agencies (MDAs) prepare to spend about N24 billion on software projects in 2026, even as regulators warn that more than half of public sector IT projects routinely fail.
Budget details of the 2026 Appropriations Bill show that the National Identity Management Commission (NIMC) and nine other MDAs account for the largest software allocation among the 115 agencies earmarked for IT procurement this year. The spending spans identity management, education, mining, cyber security, health, finance and immigration, which are central to the government's digital governance ambitions.
Yet the scale of the investment is reviving long-standing concerns about weak oversight, system duplication and value leakage, especially in a financial environment where public trust in government spending remains fragile.
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Expenditure increased due to identity, education
NIMC alone is expected to spend N7.58 billion on software in 2026, the largest allocation among federal agencies. This spending underlines the strategic importance of infrastructure to Nigeria's national identity, which underpins financial inclusion, security checks and social programs.
The Federal Ministry of Education (HQ) is also behind with a proposed N7.55 billion software budget, which reflects the expanded digitization of education administration, data management and examination systems.
Other major allocations include the Mining Cadastral Office (N2.23 billion), Geological Survey of Nigeria Agency (N1.32 billion), National Cyber Crime Coordination Center (N1.26 billion) and Nigeria Center for Disease Control (N1.23 billion). The Federal Ministry of Finance is set to spend N1.09 billion, while the Nigeria Immigration Service and the Budget Office of the Federation are among the top spenders.
Together, the allocations highlight how deeply software now sits at the core of Nigeria's administrative machinery.
A familiar problem: spending without results
Despite the scale of investment, regulators say results have been consistently low.
The National Information Technology Development Agency (NITDA) last year revealed that 56 per cent of IT projects executed by federal public institutions failed, mainly due to poor compliance with mandatory IT project approval guidelines.
Kashifu Inuwa, Director General of NITDA, said, “These projects fail because they are not approved to ensure alignment with national standards and priorities. We must stop wasting public money on fragmented, disorganized IT systems that do not deliver value.”
According to NITDA, the technical nature of software projects often shields them from rigorous scrutiny during National Assembly budget protections, creating opportunities for increased costs, duplication and misaligned systems.
Purchase Risks and Abuse
The Bureau of Public Procurement (BPP) echoes these concerns, warning that software and IT projects are increasingly being used to hide inefficiencies and corruption.
“Most IT projects are intangible, and some MDAs use them to siphon public funds. We have seen projects submitted without standardization, leading to inefficiencies and corruption,” said Adebowale Adedokun, director-general of the BPP.
The absence of shared platforms, common standards and price benchmarks means agencies often purchase similar systems independently, often at very different costs.
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capital flight through code
Beyond governance concerns, industry experts say Nigeria's software spending has become a lost industrial opportunity.
Jid Awe, an IT expert, said the MDA's preference for foreign solutions leads to a significant portion of the government software budget flowing abroad, even where local alternatives exist.
“A big problem is that money is not being pumped into the economy. Most agencies still prefer to import software, and funds that could support local developers leave the country,” Avey told BusinessDay.
The Institute of Software Practitioners of Nigeria (ISPON) estimates that Nigeria loses about N156 billion annually due to software importation, a trend reinforced by government procurement practices.
Steps to curb wastage
In response, BPP says it has introduced standard bidding documents for IT procurement and is working closely with NITDA to reduce duplication and improve transparency.
Adedokun has also called for centralized procurement of software licenses for major global vendors and the creation of a national IT price intelligence template to curb contract inflation.
He said, “With proper coordination and standardization, we can transform IT from a liability to a powerful asset for national development.”
For now, Nigeria's growing software budgets present a paradox: a state eager to modernize, yet struggling with the basic discipline needed to ensure that the billions spent on code translate into better services, stronger institutions, and real economic value.
