According to former vice president Atiku Abubakar, President Bola Tinubu’s planned ₦49.7 trillion 2025 budget is insufficient to address Nigeria’s structural and economic issues.
“The 2025 budget’s capacity to foster sustainable economic growth and tackle Nigeria’s deep-rooted challenges is questionable,” Atiku said in a statement on Sunday.
Tinubu gave the budget estimate to a joint session of the National Assembly on Wednesday. The ₦49.7 trillion budget proposal included significant investments for a number of areas, including infrastructure, health, education, and security and defense.
Among the budget’s highlights, Tinubu mentioned N4.91 trillion for defense and security, N4.06 trillion for infrastructure, N2.4 trillion for health, and N3.5 trillion for education.
Atiku said, “1. Weak Budgetary Foundations: The 2024 budget’s underperformance signals poor budgetary execution. By Q3 of the fiscal year, less than 35% of the allocated capital expenditure for MDAs had been disbursed, despite claims of 85% budget execution. This underperformance in capital spending, crucial for fostering economic transformation, raises concerns about the execution of the 2025 budget.
“2. Disproportionate Debt Servicing: Debt servicing, which accounts for N15.8 trillion (33% of the total expenditure), is nearly equal to planned capital expenditure (N16 trillion, or 34%). Moreover, debt servicing surpasses spending on key priority sectors such as defence (N4.91 trillion), infrastructure (N4.06 trillion), education (N3.52 trillion), and health (N2.4 trillion). This imbalance will likely crowd out essential investments and perpetuate a cycle of increasing borrowing and debt accumulation, undermining fiscal stability.
“3. Unsustainable Government Expenditure: The government’s recurrent expenditure remains disproportionately high, with over N14 trillion (30% of the budget) allocated to operating an oversized bureaucracy and supporting inefficient public enterprises. The lack of concrete steps to curb wastage and enhance the efficiency of public spending exacerbates the fiscal challenges, leaving limited resources for development.
“4. Insufficient Capital Investment: After accounting for debt servicing and recurrent expenditure, the remaining allocation for capital spending, ranging from 25% to 34% of the total budget, is insufficient to address Nigeria’s infrastructure deficit and stimulate growth. This equates to an average capital allocation of approximately N80,000 (US$45) per capita, insufficient to meet the demands of a nation grappling with slow growth and infrastructural underdevelopment.
“5. Regressive Taxation and Economic Strain: The administration’s decision to increase the VAT rate from 7.5% to 10% is a retrogressive measure that will exacerbate the cost-of-living crisis and impede economic growth. By imposing additional tax burdens on an already struggling populace while failing to address governance inefficiencies, the government risks stifling domestic consumption and further deepening economic hardship.
“In conclusion, the 2025 budget lacks the structural reforms and fiscal discipline required to address Nigeria’s multifaceted economic challenges.
“To enhance the budget’s credibility, the administration must prioritize the reduction of inefficiencies in government operations, tackle contract inflation, and focus on long-term fiscal sustainability rather than perpetuating unsustainable borrowing and recurrent spending patterns.
“A shift towards a more disciplined and growth-oriented fiscal policy is essential for the nation’s economic recovery.”
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