Concerns grow over federal, states’ 2025 budgets

…It’s yet another false hope – Olu Fasan

… ‘Too small to address huge nation’s challenges’

Concerns are mounting over Nigeria’s 2025 budgets at both federal and state levels, with analysts expressing concerns that the proposed figures may be insufficient to meet the nation’s pressing humanitarian and infrastructural needs.

Federal budget overview

President Bola Tinubu had proposed a substantial budget of N49.7 trillion for this year, termed the “Budget of Restoration: Securing Peace, Rebuilding Prosperity.”

This proposal marked a significant increase from the N28.77 trillion budget of 2024. However, critics argue that despite the increased allocation, the budget may not effectively address the challenges faced by ordinary Nigerians.

Concerns have been raised about the allocation of funds, with substantial portions directed towards recurrent expenditure and debt servicing, potentially leaving limited resources for direct welfare improvements.

The Federal Government is faced with a daunting fiscal challenge as debt servicing takes a huge chunk of its proposed N49.7 trillion 2025 budget.

With N15.8 trillion or 45 percent of its projected N34.82 trillion revenue earmarked for debt repayment, there is growing concern about the country’s fiscal sustainability and economic resilience.

For context, this debt servicing estimate surpasses the combined N14.97 trillion earmarked for critical sectors such as security, infrastructure, education, and health.

To further ease the country’s debt burden, civil society organisations have asked the National Assembly to reduce the proposed N344.85bn allocation in the 2025 budget for lawmakers and cut down non-essential spending of the executive including, N9.4bn on travels, refreshment/meals, and foodstuff/catering materials for the presidency.

“The proposed huge spending is neither necessary nor in the public interest, especially in the face of the country’s dire economic situation and the level of proposed borrowing to fund the 2025 budget,” the Socio-Economic Rights and Accountability Project (SERAP) said in a letter dated December 21, and addressed to the lawmakers.

State budgets and recurrent expenditure

An analysis of the budgets from 13 Nigerian states including Lagos, Oyo, Osun, Bayelsa, Bauchi, Anambra, Gombe, Ekiti, Cross River, Akwa Ibom, Delta, Plateau, and Katsina reveals a combined proposed expenditure of N9.07 trillion for 2025. Of this, approximately N3.87 trillion is allocated for recurrent expenditure, covering administrative costs such as salaries and overheads.

This allocation suggests a significant portion of state budgets is dedicated to maintaining government operations, potentially at the expense of capital projects aimed at infrastructure development.

This pattern raises questions about the states’ commitment to infrastructural development and people-centred projects, especially considering that millions of Nigerians have fallen below the poverty line in recent times. The World Bank recently projected that over 129 million Nigerians now live below the poverty line.

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

Education sector concerns

The Academic Staff Union of Universities (ASUU) has criticised the Federal Government’s allocation of 7% (N3.52 trillion) of the 2025 budget to education. ASUU argued that this falls short of the 15-20% benchmark recommended by UNESCO and the United Nations Population Fund (UNFPA) for developing countries.

The union warned that such underfunding could perpetuate existing challenges in the education sector, including inadequate infrastructure and poor welfare conditions for educators, potentially deterring qualified individuals from pursuing teaching careers.

Analysts caution that without a strategic shift in spending patterns and policy reforms, the 2025 budget may struggle to deliver meaningful improvements in living standards for the Nigerian populace.

Olu Fasan, a popular columnist, contended that previous budgets with similar optimistic titles have failed to alleviate the hardships faced by ordinary Nigerians, citing persistent issues such as widespread hunger and insecurity.

“Well, now, Tinubu has proposed a budget of N47.9 trillion for 2025. He calls it “Budget of Restoration: Securing Peace, Rebuilding Prosperity.” But would this staggering sum make an iota of difference to the lives of ordinary Nigerians? The answer, sadly, is no. For truth be told, it’s yet another false hope!,” Fasan said in an article published on BusinessDay last week.

While the proposed 2025 budgets at both federal and state levels reflect an increase in allocations, concerns persist regarding their adequacy in addressing Nigeria’s developmental needs.

The emphasis on recurrent expenditures, coupled with concerns over insufficient funding for critical sectors like education, health and the burden of debt servicing, underscores the need for a comprehensive review of budgetary priorities to ensure impactful and sustainable growth.