The Federal Government has unveiled its proposed 2025 budget, with a projected total expenditure of N47.96 trillion and a deficit of N13.13 trillion, which will be financed through borrowing. The announcement was made by the Minister of Finance and Coordinating Minister for the Economy, Mr. Wale Edun, following the Federal Executive Council (FEC) meeting held at the Presidential Villa in Abuja.

Overview of the 2025 Budget

The 2025 budget reflects an ambitious fiscal strategy aimed at addressing Nigeria’s economic challenges while consolidating the gains achieved under President Bola Tinubu’s administration over the past 18 months. Key highlights include:

• Total Expenditure: N47.96 trillion
• Total Projected Revenue: N34.82 trillion
• Budget Deficit: N13.13 trillion (3.89% of GDP)
• Increase from 2024 Budget: 36.8% rise in expenditure
• Oil Price Benchmark: $75 per barrel
• Oil Production Target: 2.06 million barrels per day
• Exchange Rate: N1,400 to the US dollar

The projected deficit, while significant, represents a reduction from the 6.1% deficit of GDP inherited in the 2023 budget. This signals the government’s commitment to gradually restoring fiscal sustainability.

Financing the Deficit: Borrowing as a Strategy

Addressing concerns about the budget deficit, Mr. Wale Edun assured Nigerians that borrowing remains a necessary tool to bridge the financing gap. He explained that the government is prioritizing fiscal balance and long-term economic growth while maintaining prudent borrowing practices.

“Governments around the world are concerned about achieving fiscal sustainability. For a private-sector-led economy like ours, borrowing will enable us to invest in critical infrastructure, increase productivity, and create jobs while positioning the country for growth,” Edun said.

The minister highlighted several measures being implemented under Tinubu’s administration to attract private sector investments and improve economic stability:

• Market-Based Pricing Policies: Deregulation of petroleum products and foreign exchange rates.
• Electricity Sector Reforms: Efforts to improve electricity pricing and reliability.
• Investment Milestones: Recent announcements of multi-billion-dollar investments by Shell and Total, signaling international confidence in Nigeria’s economic policies.

Economic Improvements: A Glimpse of Progress

Edun underscored several economic achievements that demonstrate Nigeria’s progress:

1. Domestic Refinement of Petroleum:
   • For the first time in 25 years, Nigeria has achieved domestic refining capacity for petroleum products. This reduces the reliance on imports and provides essential raw materials for key industries, including pharmaceuticals, textiles, and construction.
2. Private Sector Investments:
   • Recent multi-billion-dollar investments in Nigeria highlight growing investor confidence, a critical driver for economic growth and poverty reduction.
3. Focus on Growth Sectors:
   • The administration’s policies are aligned to boost productivity, create jobs, and expand economic opportunities across agriculture, industry, and technology.

Alignment with Renewed Hope Agenda and National Priorities

The 2025 budget is strategically designed to align with President Tinubu’s Renewed Hope Agenda and the National Development Plan (2021–2025). According to the Minister of Budget and Economic Planning, Atiku Bagudu, the fiscal strategy focuses on addressing Nigeria’s critical needs while promoting inclusive growth. Key areas of focus include:

1. Infrastructure Development:
   • Investments in roads, bridges, energy, and transportation to boost productivity and ease the cost of doing business.
2. Education and Health:
   • Increased funding for skill-building, education reforms, and healthcare services to enhance human capital development.
3. Food Security:
   • Strengthening the National Agricultural Development Fund to boost agricultural productivity and ensure food sufficiency.
4. Industrialization and Job Creation:
   • Expanding industrial activity, diversifying the economy, and promoting local manufacturing to reduce unemployment.
5. Energy Transition Initiatives:
   • Advancing gas and compressed natural gas (CNG) programs to reduce reliance on petrol and achieve cleaner energy goals.
6. Affordable Housing:
   • Promoting housing schemes to address the significant housing deficit and provide homes for Nigerians.

National Assembly Postpones Budget Presentation to December 18

In a related development, the National Assembly has shifted the presentation of the 2025 budget estimates to Wednesday, December 18, 2024, as communicated through an official memo signed by Dr. Umar A. Alkali, Secretary of Human Resources and Staff Development. Initially scheduled for December 17, the delay allows for final amendments to ensure the budget aligns with national priorities and feedback from stakeholders.

The memo stated:

“The presentation of the 2025 Budget by the President and Commander-in-Chief, His Excellency Senator Bola Tinubu, has been postponed to Wednesday, December 18, 2024.”

Public Reaction: Optimism Amid Fiscal Challenges

The 2025 budget proposal has sparked mixed reactions among stakeholders, economists, and the general public. While some commend the government’s focus on fiscal sustainability and critical investments, others remain concerned about the implications of borrowing on Nigeria’s debt profile.

• Economic Analysts: Experts acknowledge the importance of borrowing to finance infrastructure but stress the need for transparency and efficient utilization of funds.
• Private Sector Leaders: Businesses view the emphasis on private-sector-led growth and investment-friendly policies as a positive signal for economic recovery.
• Civil Society: Some groups call for increased accountability to ensure budget allocations directly address issues like poverty, unemployment, and inflation.

Conclusion: A Bold Fiscal Roadmap for 2025

The 2025 budget, with its ambitious N47.96 trillion expenditure and N13.13 trillion deficit, represents a bold fiscal roadmap aimed at consolidating economic progress and addressing critical challenges. While borrowing will finance the deficit, the government’s emphasis on attracting private investments, improving infrastructure, and fostering economic diversification sets a foundation for sustainable growth.

As Nigeria navigates its fiscal challenges, the success of this budget will depend on effective implementation, accountability, and the active participation of the private sector in driving economic transformation.