Nigeria Approves ₦47.9 Trillion Budget for 2025
The Nigerian government has approved a ₦47.9 trillion budget for the 2025 fiscal year, marking a significant 35% increase from the ₦35.5 trillion allocated for 2024. The approval was made by the Federal Executive Council (FEC) on Friday, November 15, 2024, under the leadership of President Bola Tinubu. This new budget sets ambitious projections, including a target for 4.6% GDP growth, an oil price forecast of $75 per barrel, and an exchange rate of ₦1,400 to the dollar.
Key Allocations and Projections for 2025
The 2025 budget outlines several important allocations and goals. It earmarks ₦9.92 trillion for non-debt recurrent spending and ₦7.72 trillion for capital expenditure. The government has also allocated ₦8.25 trillion for debt servicing and ₦1.37 trillion for statutory transfers. A sinking fund of ₦243.66 billion has been set aside to address long-term financial obligations. Despite these ambitious targets, there are concerns about how effectively these funds will be used, given the challenges faced in the previous year’s budget.
2025 Budget Deficit and Funding Plans
The 2025 budget projects a deficit of ₦13.08 trillion, an increase from ₦9.18 trillion in 2024. This represents 38% of federal revenues and 3.87% of the projected GDP. A substantial portion of the deficit is attributed to the new minimum wage, pension obligations, and rising debt servicing costs. To cover this gap, the government plans to issue $1.7 billion in Eurobonds and $500 million in Sukuk bonds. However, concerns about Nigeria’s growing reliance on foreign borrowing remain.
Delays and Concerns Over the 2024 Budget
As the government focuses on the 2025 budget, many Nigerians are reflecting on the performance of the 2024 budget. The Medium Term Expenditure Framework (MTEF) for 2025 was already overdue by 48 days as of November 18, 2024, causing frustration among lawmakers and citizens. The delay in submitting the MTEF has raised concerns about the government’s ability to manage financial planning effectively. Critics argue that such delays result in inefficiency and provide room for corruption and mismanagement of funds.
Challenges with 2024 Budget Execution
Despite the large allocations for key sectors in the 2024 budget, Nigeria continues to face significant challenges in infrastructure, education, security, and healthcare. For instance, while ₦1.32 trillion was allocated for infrastructure, Nigerians continue to face power shortages and transportation difficulties. The education sector remains troubled, with millions of children out of school, despite receiving more than 7% of the budget. Similarly, insecurity continues to rise, with the government allocating ₦3.25 trillion for security, yet challenges like banditry and kidnappings persist.
Public Skepticism About the 2025 Budget
As Nigeria prepares for its 2025 budget, many citizens are questioning the effectiveness of previous budget allocations. With poor results from the ₦35.5 trillion budget in 2024, Nigerians are wary of another large financial commitment. They are asking whether the increase in the budget will translate into meaningful improvements or if it will be another unfulfilled promise. The growing frustration surrounding budget execution raises serious questions about the future of Nigeria’s fiscal management and its ability to meet the needs of its citizens.
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