2025 budget: Ambition vs reality
The presentation of Nigeria’s 2025 budget, labelled the ‘Budget of Restoration: Securing Peace, Rebuilding Prosperity,’ marks an ambitious step in the government’s efforts to restore economic stability and tackle the country’s deep-rooted challenges. With a record allocation of N49.7 trillion, the proposal reflects the government’s priorities and vision for a more secure, prosperous nation. However, while the budget lays out a bold framework for addressing issues of security, infrastructure, education, healthcare, and food production, several risks and concerns could undermine its effectiveness if not carefully managed.
At the heart of the budget is a substantial N4.9 trillion (9.8 percent) allocated to security. This allocation reflects the urgent need to combat insurgency, banditry, and other threats to national stability, which have wreaked havoc on many regions, particularly in farming and food production. The importance of this allocation cannot be overstated, as national security is directly tied to the economic well-being of the country.
Beyond security, the government has also earmarked significant portions of the budget for infrastructure (N4.06 trillion), education (N3.52 trillion), and healthcare (N2.48 trillion). These sectors have long been neglected, with inadequate funding and poor outcomes undermining the country’s development. Nigeria’s roads, power supply, and transport systems are in dire need of investment, while the country’s education and healthcare systems are plagued by chronic underfunding and mismanagement. The proposed funding is a step in the right direction, but the challenge lies in ensuring that these funds are utilised effectively to achieve tangible improvements.
For instance, the allocation for healthcare, although commendable, falls short of addressing the widespread deficiencies within the sector. Nigeria’s primary healthcare system, which is the backbone of the nation’s health services, remains underfunded and poorly managed. Similarly, the education sector suffers from inadequate funding, frequent strikes, and outdated infrastructure. The proposed N3.52 trillion for education is a step forward, but it must be scrutinised to ensure it is directed towards reforms that address the systemic problems within the sector.
However, perhaps the most pressing concern with the 2025 budget is the heavy reliance on borrowing. With a budget deficit of N13.08 trillion and a staggering N15.81 trillion earmarked for debt servicing, nearly half of Nigeria’s anticipated revenue will be used to pay off existing debt. This raises serious concerns about the sustainability of the country’s debt trajectory. The government must manage its borrowing carefully to avoid falling into a debt trap that could cripple the economy in the long term. A heavy debt burden also limits the government’s ability to invest in essential sectors such as education, healthcare, and infrastructure.
In addition, the ambitious growth projections for the economy and the unrealistic inflation targets raise doubts about the feasibility of the budget’s objectives. Inflation remains stubbornly high at 34.6 percent, and while the Central Bank’s policies may help, achieving a drastic reduction to the projected 15 percent by 2025 seems overly optimistic. Similarly, the target exchange rate of N1,500 to $1 hinges on factors beyond the government’s control, such as global oil prices and foreign investment inflows, which are fraught with uncertainty.
One of the most glaring omissions in the 2025 budget is the inadequate allocation for agriculture, which has been allocated a mere N826 billion, just 1.66 percent of the total budget. This falls far short of the 10 percent target set by the Malabo Declaration to end hunger in Africa by 2025. Given that agriculture is central to Nigeria’s food security and economic prosperity, this underinvestment suggests that the government is not fully prioritising one of the country’s most pressing challenges. Without a substantial increase in investment in agriculture, Nigeria will struggle to achieve food security and address the economic hardships faced by millions of farmers.
The government must look to successful examples, such as Brazil, which invests heavily in agricultural innovation, technology, and farmer support. By focusing on technology-driven farming, irrigation, and livestock development, Nigeria could unlock the full potential of its agricultural sector, boost productivity, and enhance food security.
For the 2025 budget to succeed, several key reforms are necessary. First, Nigeria must overhaul its tax system, which currently has a tax-to-GDP ratio of just 10.9 percent, far below the African average. Tax reform is essential to reducing the country’s reliance on borrowing and ensuring that the government can sustainably fund its development plans. This will require expanding the tax base, improving compliance, and addressing inefficiencies within the tax collection system.
Also, fiscal discipline must be at the core of the government’s approach. Nigeria has long struggled with inefficient budget implementation, where allocated funds are often not disbursed in a timely manner, and procurement practices are often marred by corruption. Ensuring that funds reach their intended destinations and are used effectively is crucial to achieving the desired outcomes of the 2025 budget.
Furthermore, there must be continuity in policies and projects. Changes in administration often derail long-term plans, and this can lead to wastage and inefficiency. A robust monitoring and evaluation framework is necessary to ensure that the budget’s objectives are met, and that the government remains accountable for its spending.
While the 2025 budget presents a bold and ambitious plan for Nigeria’s future, its success will depend on the government’s ability to address the underlying challenges of fiscal management, debt sustainability, and sectoral inefficiencies. The National Assembly must hold the government accountable, ensuring that every naira is spent wisely and effectively. With strong political will, transparent governance, and a commitment to long-term reforms, the 2025 budget has the potential to be a transformative instrument of change for Nigeria. However, it must go beyond rhetoric and deliver tangible results that improve the lives of ordinary Nigerians.
