N54.99trn 2025 budget: Knocks, kudos trail fiscal estimate

By Patrick Wemambu

Mixed reactions have continued to trail the passage of the 2025 Nigerian budget of N54.99trn by the National Assembly Thursday. A breakdown of the budget shows Statutory Transfers of N3.65trn, Recurrent (Non-Debt) Expenditure N13.64trn and Capital Expenditure amounting to N23.96trn. Debt Servicing is to gulp N14.32trn with N13.08trn for Fiscal Deficit and a Deficit-to-GDP Ratio of 1.52%.

It would be recalled that before the passage, the clause-by-clause consideration of the bill had revealed the National Assembly allocated to itself a total sum of N344.85bn in the fiscal year with the National Judicial Council having N521.63bn.

Niger Delta Development Commission had N626.53bn with N145bn going to the North West Development Commission. Whereas the South-South, South-East, South-West and North-Central Development Commissions were allocated N140bn each by the Appropriation Committee, the North-East Development Commission had N241bn.

Further breakdown of allocations showed N140bn going to the Independent Electoral Commission, N111bn to The Presidency, Ministry of Defence N2.5trn and Ministries of Foreign Affairs and Information & National Orientation allotted N286.89bn and N75.88bn, respectively. Others include the Ministry of Police Affairs, N1.2trn, Office of the Secretary to Government of the Federation, N140bn and Ministry of Agriculture & Food Security N155bn.

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Laudable as the passage of the budget appears, experts and stakeholders are divided over the potentialities of the appropriation to translate into real economic growth.

…Late passage of budget

Speaking to the Daily Times in a telephone interview, Dr. Ayo Teriba, CEO, Economic Associates Lagos, expressed concerns about the late passage of the budget in February as opposed to December 31st, even as he congratulated the government for the feat achieved. Said he; “It’s better late than never.

We hope they find the revenue to implement it because they didn’t find the revenue to implement the 2024 budget in full. Maybe they only found half as much revenue as they had hoped…One would have hoped that they would have been more moderate about what they announced for 2025 (projections) but they are not moderate, they are still breaking the bar.”

Lamenting that the nation is still doing almost N55trn now when it couldn’t find more than N25trn to spend last year, the seasoned economist wondered where the (balance) of N30trn is going to miraculously come from which he said is best known to the government.

Asked to comment on the frequent revision of the proposal which critics have ascribed to lack of proper planning or reactive approach to budgeting? Hon. Clement Jimbo, Member Representing Abak/Etim Ekpo/Ika Constituency in Akwa Ibom State at the House of Representatives, rued that preparing a budget of a nation is beyond economics and sitting behind computer.
His words in an exclusive interview with our Correspondent; “I would say yes and no.

When I came into the National Assembly I was one of those who drove the process of how the budget is prepared. Who are those behind the numbers? What are those behind the figures? What are their professional levels of knowledge? … Because I have seen a road project where a 15.5km of road was apportioned about N5million in the budget and I queried it.

The fact is that many of the people behind those figures are not in tandem with realities of things. Preparing a budget of a nation is beyond economics and sitting behind computers. That is a challenge.”

However, Dr. Ayo Teriba, CEO, Economic Associates in Lagos disagreed with Hon. Jimbo. According to the economist, budget has to be arrived at based on consultations which he viewed as normal within these climes – opining that otherwise it would amount to unnecessary fault-finding.

…Realistic projections?

How realistic are the projections? If the government is able to fund the policy instrument as planned, it will hit some economic targets including growth, inflation, exchange rate. So whether the government is going to meet aspirations about growth or inflation depends on the extent to which they fund the budget…The only thing that’ll give you control is that we all presume that you have considered that you need to spend N55trn to hit the targets.

Pundits have maintained that some of the budget projections are unrealistic. But Dr. Tope Fasua, Special Adviser to Mr. President on Economic Affairs in the Office of the Vice President pooh-poohed the assertion. He told us in a telephone interview; “Pundits would do what they have to do.

It is hoped that with time they will be more realistic. The usual thing is to just sit down and rubbish any idea. I used to be a pundit but I ensured that I always looked at the two sides (of the coin). I was always optimistic about the country. Unfortunately, there is this pervading pessimism on the part of those who call themselves pundits.”

Commenting on how to achieve the projected 15% inflation rate, the top government official argued that Nigeria doesn’t necessarily have to meet it the way it is set out. If we’re talking about 34.80% inflation now and we’re able to work it down to 20% or 22%, that won’t be a bad idea, Fasua hypothesized.

He asserted that sometimes, it’s good to make such projections so that one can land at a good place – declaring that those who aim for the sky, can find themselves among the stars. “Meanwhile, there is really nothing impossible about achieving that 15%.

There’s one economy that the Nigerian economy mirrors a lot and that is the Pakistani economy. It’s almost uncanny. We have almost the same population…However, I’ve been watching how they too were around 35%, 40% inflation rate but were able to work it down to about 23%,” the Special Adviser concluded.

…Expansionary budget

Touted as one of the highest budgets Nigeria has had in recent past, the 2025 appropriation can be said to be expansionary in nature. Prof. Uchenna Uwalaka, Nigeria’s first professor of capital market in a tete-a-tete with our NASS coreespondent could not agree more. He concurred; “It’s an expansionary budget which is the highest we’ve had in a long while but if not well applied can stoke inflation.

It may also worsen the exchange rate crisis if the money is not applied to developmental projects. But the good thing is that the capital component is now substantial. If you look at it the capital component is around N24trn. Debt Service has been reduced. That to me is positive.”

But is it just enough to have it on paper? We inquired. The reply was in the negative. What is important is implementation which is usually below average most of the time, we learnt. Highlighting the essence of prioritizing the developmental portion of capital components, the erudite scholar pointed out the initial budget proposal of N49.7trn which Mr. President then increased to N54.2trn before the NASS jerked the sum to N54.99trn.

Uwalaka enthused; “It is good to hear that the extra (N5.29trn) will be used to recapitalize the Bank of Industry, Bank of Agriculture and the Developmental Banks.

Recapitalizing is very important because it means we put them in a strong position to lend long-term for development. It is also a good thing to hear that more allocations are going to Solid Minerals, infrastructure, etc.”

…Navigating disruption of budget cycle

How should we navigate the apparent disruption of the budget cycle? “Going forward, the Executive Arm should make efforts to submit the proposals in time…We should avoid disrupting the budget cycle of January to December. I expect the 2026 budget process to start in time…This one was more or less done in a hurry without subjecting it to public hearing,” the professor of capital market advised.

…Risks of heightened inflation

Does the budget parade risks of heightened inflation owing to unrealistic projections? Prof. Uwalaka replies in the affirmative; “The risk will be there because it is expansionary. Application of funding to recurrent expenditure and consumption should be discouraged. It should be only for productive purposes. I think we’re using $75 benchmark and 2.06 million barrels. It would appear that those projections are not realistic. The inflation rate appears unrealistic although we’re expecting a rebased figure.”

…Optimistism for real sector growth translation

If there is one Nigerian that is very optimistic about potentialities of the N54.99trn budget translating into real sector growth, that individual would be Dr. Tope Fasua, Special Adviser to the President on Economic Affairs. He confided in our correspondent; “Clearly, you can see that the capital component is a lot larger (N23.9trn), Recurrent (Non Debt) expenditure is N13.6trn while Debt servicing is N14.3trn.

There was a deliberate attempt to beef up the capital component. The increment of the N4.5trn was necessary due to additional revenue from the FIRS, NCS and other revenue-generating agencies last year. This is going straight into capital (projects) which should help address developmental challenges.”