Security, human capital, infrastructure top Tinubu’s 2025 budget priorities

…Food security budget jumps 128%

…Analysts describe assumptions as ‘ambitious’

…Five-year budgets show assumptions haven’t been realistic

President Bola Tinubu allocated 31 percent of the 2025 budget to security, defense, education, health and infrastructure, reflecting his priorities for the coming year.

At a joint session of the Senate and House of Representatives on Wednesday, Tinubu noted that his N47.9 trillion budget for 2025 is targeted at protecting Nigerians and the nation’s territory, while improving infrastructure, health and education outcomes.

According to the budget details seen by BusinessDay, defence and security took N4.91 trillion, while infrastructure was allotted N4.06 trillion. Health and education, which are pillars of the human capital, took N2.48 trillion and N3.52 trillion respectively.

“Security is the foundation of all progress. We have significantly increased funding for the military, paramilitary, and police forces to secure the nation, protect our borders, and consolidate government control over every inch of our national territory,” Tinubu said.

“The government will continue to provide our security forces with the modern tools and technology they need to keep us safe. Boosting the morale of our men and women in the armed forces will remain our government’s top priority.”

On infrastructure development, Tinubu noted that his government plans to accelerate investments in energy, transport, and public works.

“By leveraging private capital, we hope to complete key projects that drive growth and create jobs. We have already embarked on key legacy projects: Lagos-Calabar Coastal Highway and Sokoto-Badagry Highway, which will have a huge impact on the lives of our people and accelerate economic output,” he said.

On human capital development, Tinubu said his administration is making ‘record investments’ in education, healthcare, and social services.

“In the 2025 Budget, we have made provision for 826.90 billion naira for infrastructure development in the educational sector. This provision also includes those for the Universal Basic Education (UBEC) and the nine new higher educational institutions,” he said.

He said his government is convinced that the Universal Health Coverage initiatives will strengthen primary healthcare systems across Nigeria, noting that it has allocated N402 billion to infrastructure investments in the health sector in the 2025 budget and another N282.65 billion for the Basic Health Care Fund. “Our hospitals will be revitalised with medication and better resources, ensuring quality care for all Nigerians. This is consistent with the Federal Government’s planned procurement of essential drugs for distribution to public healthcare facilities nationwide, improving healthcare access and reducing medical import dependency.”

Read also: How FG’s proposed 2025 budget plans to lift agriculture sector

Big Plans for Food Security

Tinubu’s administration allocated N826.5 billion to agriculture to boost food security and generate agro-based employment in the coming year.

The allocation represents a 127.8 percent increase from N362.94 billion allotted to the sector in 2024. Capital allocations also rose by 130 percent compared to last year.

“Food security is non-negotiable. In this regard, we are taking bold steps to ensure that every Nigerian can feed conveniently, and none of our citizens will have to go to bed hungry,” Tinubu assured in his budget speech.

With a population surpassing 220 million and an annual growth rate of 2.4 percent to 2.6 percent, Nigeria is under increasing pressure to enhance its food production to feed its people.

“To ensure food sufficiency and reduce reliance on imports, N826.5 billion has been allocated to agricultural mechanisation, irrigation projects, and value-chain development,” Tanimu Yakubu, director-general, Budget Office of the Federation, noted.

“This will not only boost food production but also support economic diversification and rural development.”

In the third quarter of 2024, the agriculture sector grew by 1.14 percent, contributing 28.65 percent to GDP in the same period.

A significant barrier to the sector’s growth has been modernisation due to the lack of mechanisation. Consequently, government seeks to promote collaborations with the private sector to enhance mechanisation across crop, livestock, and aquaculture sectors, according to a budget document seen by BusinessDay.

“Plans include establishing commodity exchanges and supporting agro-processing centers, which will not only drive import substitution but also address youth unemployment.”

Read also: Five numbers from Nigeria’s 2025 budget presented by Tinubu

Ambitious Budget

The 2025 budget has key budget assumptions. The Tinubu administration is targeting N34.82 trillion in revenue to fund the budget.

The government envisions spending N47.9 trillion naira ($31 billion) and collecting N34.8 trillion of revenue in the fiscal year starting Jan. 1. That leaves a deficit of N13.1 trillion, or about 3.9 percent of the gross domestic product (GDP), which the nation will fund by raising debt in local and international markets.

The government forecasts 4.6 percent growth in GDP next year, which would be the fastest pace in a decade. That’s more optimistic than the 3.2 percent projected by the International Monetary Fund (IMF) and the 3.7 percent anticipated by the African Development Bank (AfDB). It expects annual inflation to slow to 15 percent in 2025, from more than 34 percent.

“This is an ambitious but necessary budget to secure our future,” Tinubu, who has championed an ambitious programme to steady the nation’s finances since taking office in May last year, told lawmakers in Abuja, the capital.

Tinubu’s reforms, which included devaluing the naira, abolishing a complex multiple exchange-rate system and scrapping costly gasoline subsidies, have been welcomed by the IMF and World Bank. But soaring inflation has led to an increase in the cost of living, worsening the plight of more than half of the population who live below the poverty line.

On the plus side, foreign investment in the oil and gas sector reached more than $5 billion, according to the president. The West African nation is seeking to attract $10 billion in new investments for deep-water gas exploration through tax incentives and other measures.

The government’s revenue targets are based on an oil price of $75 per barrel and output off 2.06 million barrels per day — assumptions some analysts consider overly optimistic given that Nigeria has consistently missed its OPEC production targets in recent years.

The country produced 1.5 million barrels of crude per day last month, according to OPEC. The government has attributed the underperformance to theft, and says new projects are set to lift output. Brent crude oil traded around $73.5 on Wednesday.

“The reliance on oil revenues remains a major concern,” said Ikemesit Effiong, a partner and head of research at SBM Intelligence. “Volatility in global oil markets and Nigeria’s limited diversification undermine budget reliability. In addition, exchange-rate instability will complicate the allocation of funds and investment planning, which will impact the government’s aspirations to stimulate growth and reduce poverty.”

Ike Ibeabuchi, an emerging markets expert, said, “This is just another ambitious budget, with little or no solid foundations. With food production facing uncertainties, inflation cannot come down to 15 percent. Oil production target is also just unrealistic due to theft , exits of IOCs and under-investments.”

Senate extends 2024 budget to June 2025

The Nigerian Senate has speedily extended implementation of the capital component of the N28.7 trillion 2024 budget from December 31, 2024 to June 30, 2025.

This followed request by President Bola Tinubu, which was convened in a letter to the Upper Chamber. He explained that the extension is to enable government complete ongoing infrastructural projects.

The bill for an act to amend the 2024 Appropriation Act scaled first, second and third reading during Senate plenary session in Wednesday. The Red Chamber passed the bill shortly after President Tinubu laid the 2025 budget proposal before a joint session of the National Asesembly.

Godswill Akpabio, Senate president, had earlier announced during the presentation of the 2025 budget that the performance of the 2024 budget stood at 50 percent for capital expenditure and 48 percent for recurrent expenditure.

In July, 2024, Solomon Adeola, chairman of the Senate Committee on Appropriation, revealed that only N1.84billion has been achieved so far out of a N9 trillion capital expenditure component, which according to him, “is nothing to write home about.”

Adeola lamented the poor funding of the capital components of the budgets and urged Wale Edun, coordinating minister for the economy, to improve on it.

The capital component, Adeola noted, is essential for executing various projects that demonstrate the government’s actions to the public. He stressed the importance of better engagement with ministries, departments, and agencies (MDAs) to ensure they understand the new funding arrangements for capital projects.