Personnel and Debt Costs Dominate Expenditure
Nigeria’s Federal Government plans to spend N46.02 trillion in 2025, allocating 54% to personnel costs and debt servicing. Personnel and pension expenses are projected at N8.52 trillion, while debt servicing will require N16.33 trillion. Together, these obligations amount to a combined expenditure of N24.85 trillion. This represents a significant increase from 2024, reflecting the government’s growing financial obligations.
Salaries Witness Unprecedented Surge
The cost of salaries alone will rise to N7.54 trillion, marking a 59% increase from the N4.79 trillion allocated in 2024. This surge highlights the expanding federal payroll, which continues to strain national finances. Additionally, N984.91 billion has been earmarked for pensions and gratuities, further underlining the fiscal pressure associated with personnel expenses.
Debt Servicing Outpaces Personnel Costs
The appropriation bill reveals that the government will spend more on debt servicing than on paying salaries and pensions combined. With debt obligations consuming over one-third of the budget, the fiscal outlook underscores the critical challenge of managing Nigeria’s mounting debt burden amid economic recovery efforts.
Infrastructure and Development Allocations
President Bola Tinubu, in his budget presentation titled “Budget of Restoration: Securing Peace, Rebuilding Prosperity,” emphasized key investments in defense, infrastructure, and human capital development. However, a budget deficit of N13.39 trillion is anticipated, to be financed through increased borrowing, raising concerns about debt sustainability.
Sectoral Allocations Draw Attention
Among other expenditures, the government plans to spend N2.58 trillion on service-wide votes and N3.18 trillion on capital supplementation. Meanwhile, the State House allocated N15.09 billion for vehicle purchases and maintenance, sparking debates on fiscal discipline. Additionally, N54.38 billion will be channeled to Federal Universities of Agriculture to enhance education and food security.
Calls for Strategic Implementation
Experts and stakeholders have urged the government to ensure strategic implementation of the budget to maximize its impact. Dr. Moses Ogah, a university lecturer, stressed the need for effective utilization of resources, particularly in agricultural universities, to address food security and inflation challenges.
As Nigeria grapples with economic recovery and rising financial commitments, the 2025 budget serves as a critical blueprint for addressing the nation’s pressing challenges while navigating fiscal constraints.
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