I had wanted to write on the proposed 2025 federal budget when it was presented to the National Assembly for consideration late last year but other interests crept in. Immediately President Bola Tinubu sent a revised proposed budget to parliament increasing it from N49 trillion to N54 trillion, I knew it was time to visit the matter.
President Tinubu’s first full year budget was the 2024 appropriation Act of N35 trillion, having come into power late May 2023. It is left to Nigerians to attest if they benefited one way or another from that budget. This year, the government wants to spend much more money than last year’s spending by well over 41 percent increase.
First, the law (yes, the law) says that the President must lay before the National Assembly the proposed budget for the incoming year three months into the year that the budget is meant for. This is to enable Congress conduct a thorough review of the budget, invite relevant agencies of government to defend what is being proposed.
The President did not bother looking at what the law says about timelines, so he took the piece of document to the legislature late December. No reason was advanced as to why the appropriation bill went late. Knowing what we know about the current National Assembly, it was obvious that the President would not as much as receive a slap on the wrist. Regularly the American government gets technically shut down for a few days due to lack of budget approval by Congress. Remember the President Bill Clinton and Monica Lewinsky infidelity saga? In a manner of speaking, it was caused by idleness on the part of the President due to the shut down of his government for lack of an approved budget. For the uninitiated, Ms. Lewinsky interned at the White House when Clinton was President.
A yearly ritual it may be, but the appropriation bill (which would become an Act when signed into law by the President) is the single most important piece of legislation of government. Without the Act, government cannot function legitimately. Apart from routine operational expenses such as payment of salaries, it means that without the Act, federal institutions such as hospitals, schools, and such likes would not be built. It also means that the armed forces, the police and paramilitary forces would not be able to import weapons and ammunition for the defense of the country. Roads, bridges, telecommunications equipment, railways, power plants would not be expanded. In effect, the government will not be able to carry out any capital projects nor meet debt obligations without the approval of parliament. Where unappropriated funds are spent, it is enough ground for the legislature to commence impeachment proceedings against the President. It is that serious.
And the budget is one piece of document that Nigerians should familiarize themselves with, and use in evaluating the performance of government. It is the document government uses to implement its policies and programmes, to affect the lives of the people positively or negatively, to develop the country, its economy, environment, infrastructure, institutions and general wellbeing of the country. It is the document that government contractors and suppliers await eagerly to pitch for contracts and supplies. It is the budget that manufacturers and importers of items consumed by government agencies look to for their projections and planning. The budget sets the tone for the economic wellbeing of the country for the year. It has a way of affecting inflation, interest rates, consumption level, exchange rates, productivity and other economic indicators.
Until the increase in the budget sought by the President in January (I will provide my perspective on that shortly), I will highlight key expenditure profiles of the government in the budget for you to form an opinion on how 2025 will pan out as far as the federal budget is concerned. Bear in mind that the original budget was N49 trillion when it was submitted by the President in December.
The presidency will be spending N485 billion (much of it is on personnel costs). The presidency here does not refer to Aso Rock only. It includes all agencies of government that report to the presidency. For instance, bodies such as the Nigeria Extractive Industries Transparency Initiative, the newly created Nigerian Education Loan Fund, Economic and Financial Crimes Commission, etc. are part of the presidency. Nigeria’s presidency is the entire government of small countries. The National Assembly will have a hefty N345 billion. Because they are a law unto themselves, so everything is shrouded in secrecy as a cult, there is no breakdown of their budget.
The biggest budget guzzler is the the Ministry of Finance which goes home with a ship load of N17.5 trillion (much of it, N16 trillion is for debt servicing). It does not pay to borrow for consumption. It is safe to say that we live for security! If not, how can one explain the fact that N5.9 trillion will go into security (Defence N2.9 billion; Police Affairs N1.3 trillion; interior N1.1 trillion; and national security adviser N600 billion)! Add to that, every organisation will budget for its security! In a regime of extreme hunger and food insecurity, the budget for the office of the national security adviser is almost the same as that of the Ministry of Agriculture and food security where just over N600 billion is appropriated for. In a country of over 200 million people where power supply is still at best epileptic, the budget for defence is nearly a trillion Naira higher than that of ministry of power. Nor has the country been any safer despite the tremendous amount spent on security in the last two decades.
Alarmingly, the ministry of budget and economic planning (the supervisory authority that developed this budget) has N6.8 trillion to spend in 2025. While N2.3 trillion of that is on personnel (how many people work there!), its overhead is N1.3 trillion and, wait for it, capital expenditure is N3.2 trillion. Well, the N3.2 trillion capital budget is for service wide vote: meaning for all ministries and agencies of government. But there is nothing Capital about that capital budget because it is meant for: motor vehicles (N500 billion), office furniture and fittings (N360 billion), construction/provision of electricity (N600 billion) and rehabilitation and repairs of fixed assets (N300 billion). Acquisition of non tangible assets will gulp N1.2 trillion of which computer software is N1.1 trillion. A clear case of misplaced priority, this government will be spending slightly more money acquiring computer software than building roads given the poor state of our roads nationwide.
There is not much to show that education and healthcare, the core human capital development fields, are favoured in the budget as just N2.5 trillion and N1.9 trillion respectively are for these sectors. These are the areas that need to retain talents and ward off the migration syndrome in the system. Education and health professionals are leaving the country in droves.
Enough said, there is not much in the 2421 page document to ginger hope in the economy. Of the N49 trillion budget, N7.5 trillion is for personnel, N1 trillion for overhead, N16 trillion for debt servicing and N4.4 trillion for statutory transfers. So, not much is left to develop infrastructure which helps in giving fillip to the economy. The document is enough proof that Nigeria urgently needs the Elon Musk’s-type Department of Government Efficiency to drastically cut down on government spendings.
Worse, the revenue projections for the budget is faulty. In a regime where at best the country struggles to produce 1.5 million barrels of oil per day, it’s wishful thinking to base the budget on a 2 mbpd production. With aging infrastructure, and massive crude theft, it’s a no brainer that the projection is over ambitious.
Which explains why the increase on the budget from N49!trillion to N54 trillion asked for by the President is ill advised. According to government, the proposed budget expansion is underpinned by anticipated additional revenues from key government agencies: N1.4 trillion from the Federal Inland Revenue Service, N1.2 trillion from the Nigeria Customs Service, and N1.8 trillion from the various government-owned entities. And there is nothing tangible they want to do with the N5 trillion increase.
With this increase, the 2025 budget is 42 percent higher than the 2024 budget of N35 trillion. It would be the largest year-on-year budget increase in Nigeria’s history. For a budget that has a N13.39 trillion deficit, the anticipated revenue increase would have been better spent on reducing the deficit so as to lessen the debt burden. To make matters worse, this week the National Assembly passed the budget increasing it from N54.2 trillion to N54.9 trillion thus effectively increasing the deficit.
From where I sit, Nigerians need not think that the outcome will be any different from what we have always known. Pity!
Esiere is a former journalist!
©️2025
