Former Vice President Atiku Abubakar has called on President Bola Tinubu administration to review the size of the civil service, describing the 30 percent allocated to recurrent expenditure in the 2025 budget, as clear lack of fiscal discipline
Abubakar in his reaction to the 2025 Appropriation Bill presented to the National Assembly last Wednesday, said that the 2025 budget’s capacity to foster sustainable economic growth and tackle Nigeria’s deep-rooted challenges is questionable, given key indicators.
He described the budget as unsustainable, as “Government’s recurrent expenditure remains disproportionately high, with over N14 trillion (30% of the budget) allocated to operating an oversized bureaucracy and supporting inefficient public enterprises.”
He therefore, adviced President Tinubu to enhance the budget’s credibility by prioritising the reduction of inefficiencies in government operations, tackle contract inflation, and focus on long-term fiscal sustainability rather than perpetuating unsustainable borrowing and recurrent spending patterns.
“A shift towards a more disciplined and growth-oriented fiscal policy is essential for the nation’s economic recovery,” he said.
The former Vice President also noted that the budget did not provide for “concrete steps to curb wastage and enhance the efficiency of public spending exacerbates the fiscal challenges, leaving limited resources for development.”
He also expressed concerns over the poor allocation of resources to fund capital components, as he noted that “after accounting for debt servicing and recurrent expenditure, the remaining allocation for capital spending, ranging from 25% to 34% of the total budget, is insufficient to address Nigeria’s infrastructure deficit and stimulate growth.
“This equates to an average capital allocation of approximately N80,000 (US$45) per capita, insufficient to meet the demands of a nation grappling with slow growth and infrastructural underdevelopment.”
President Tinubu had proposed a budget of N49.7trillion with a revenue forecast of N35 trillion, resulting in a deficit exceeding N13 trillion or 4% of GDP reflects a continuation of business-as-usual fiscal practices.
The Peoples Democratic Party (PDP) Presidential candidate in the 2023 election, said the budget represents a persistent trend under the APC-led administration since 2016, wherein budget deficits have been consistently presented, accompanied by an increasing reliance on external borrowing.
To bridge this fiscal gap, the administration plans to secure over N13 trillion in new borrowings, including N9 trillion in direct borrowings and N4 trillion in project-specific loans.
According to him, “This borrowing strategy mirrors the approach of previous administrations, resulting in rising public debt and exacerbating the attendant risks related to interest payments and foreign exchange exposure.”
Abubakar also linked the current economic challenges to what he described as the weak foundation in the 2024 budget.
“The 2024 budget’s underperformance signals poor budgetary execution. By Q3 of the fiscal year, less than 35% of the allocated capital expenditure for MDAs had been disbursed, despite claims of 85% budget execution. This underperformance in capital spending, crucial for fostering economic transformation, raises concerns about the execution of the 2025 budget.”
Abubakar also berated the disproportionate Debt servicing, which accounts for N15.8 trillion (33% of the total expenditure), saying that this is nearly equal to planned capital expenditure (N16 trillion, or 34%).
“Moreover, debt servicing surpasses spending on key priority sectors such as defence (N4.91 trillion), infrastructure (N4.06 trillion), education (N3.52 trillion), and health (N2.4 trillion). This imbalance will likely crowd out essential investments and perpetuate a cycle of increasing borrowing and debt accumulation, undermining fiscal stability.
“Regressive Taxation and Economic Strain: The administration’s decision to increase the VAT rate from 7.5% to 10% is a retrogressive measure that will exacerbate the cost-of-living crisis and impede economic growth. By imposing additional tax burdens on an already struggling populace while failing to address governance inefficiencies, the government risks stifling domestic consumption and further deepening economic hardship.”
He noted that the 2025 budget lacks the structural reforms and fiscal discipline required to address Nigeria’s multifaceted economic challenges.
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