President Bola Ahmed Tinubu, GCFR, presented the Proposed 2025 Budget of Restoration, titled “Securing Peace, Rebuilding Prosperity,” to a joint session of the National Assembly on Wednesday, December 18, 2024, as required by the Nigerian Constitution. As expected, there have been divergent opinions about the appropriation bill, with many referring to it as overambitious. While the budget is achievable, the projected reduction in inflation is quite ambitious and may not be realized. More emphasis should have been placed on economic diversification.
“Unless the Naira experiences a truly remarkable resurgence, soaring far beyond the projections outlined in the appropriation bill, this ambitious target risks remaining an elusive dream.”
The aspiration of slashing inflation to a mere 15 percent—a staggering 59 percent drop within a single year—presents a formidable challenge. Imagine a runaway train desperately needing to screech to a halt. That’s the scale of the ambition. A stronger Naira, a bumper harvest overflowing from our fields, and a symphony of perfectly orchestrated monetary and fiscal policies would undoubtedly play their part in cooling down the fiery inflation. However, achieving such a dramatic deceleration feels akin to attempting a daring, impossible leap. Unless the Naira experiences a truly remarkable resurgence, soaring far beyond the projections outlined in the appropriation bill, this ambitious target risks remaining an elusive dream.
Apart from agriculture, other sectors like tourism and mining can drive economic growth and resilience. Developing the mining sector offers significant revenue-generation opportunities and will also lead to the establishment of more industries in Nigeria in a bid to take advantage of nearness to raw materials. The United Arab Emirates, France, Spain, etc., make massive revenue from tourism. Therefore, the government should have demonstrated a greater economic diversification drive in the budget. Insecurity has hindered the development of mining and tourism in Nigeria.
Stabilising the exchange rate at N1,500/US$ will require, among other things, increased foreign exchange inflows through foreign portfolio/direct investments.
improved balance of trade, increased domestic oil production, and increased refining capacity. Policies aimed at boosting exports and reducing dependency on imports are crucial for achieving currency stability and strengthening the naira.
Addressing insecurity remains fundamental to achieving the budget’s objectives. Insecurity continues to undermine agricultural productivity, deter investment, and disrupt infrastructure projects. A peaceful and stable environment is essential for economic growth and the creation of opportunities for citizens. The administration’s allocation of N4.91 trillion to defence and security underscores its acknowledgement of this challenge. However, addressing insecurity will require a comprehensive approach that combines military interventions with community engagement and socio-economic initiatives.
The 2025 Appropriation Bill, having cleared its second reading hurdle at the National Assembly, paints a bold picture of Nigeria’s future. This ambitious blueprint hinges on a delicate balancing act: taming rampant inflation, diversifying an over-reliance on oil, stabilising a volatile currency, and ensuring a secure environment for citizens and businesses to thrive. However, a closer look might warrant a reassessment of the projected inflation rate and a more robust strategy for economic diversification. The National Assembly now shoulders the crucial responsibility of meticulously scrutinising the bill, proposing amendments where necessary, and ultimately shaping the nation’s fiscal roadmap for the year ahead.
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