Knocks as Tinubu asks for 2025 budget increase, ₦49.7trn to ₦54.2trn within few months

By, Ayoofe Aiyedatiwa

In Nigeria, President Bola Ahmed Tinubu’s proposal to revise the 2025 budget is getting reactions; kudos and knocks

He seeks to increase the allocation to ₦54.2tn,. from ₦49.7trn.

A move, driven by additional revenue from key government agencies.

The Federal Government projects a total revenue of N36.35tn for 2025, anchored on improved non-oil revenue generation.

This includes expanded tax collections, customs duties, and independent revenue from government-owned enterprises, alongside oil revenue projections based on a crude oil benchmark of $75 per barrel, a production target of 2.06 million barrels per day, and an exchange rate of N1,500 per USD.

The total expenditure of N49.7tn includes significant allocations to critical sectors while targeting a fiscal deficit of N13.39tn (3.96 per cent of GDP).

This deficit will be financed through domestic and external borrowings as well as innovative public-private partnership arrangements.

Tinubu said the increase was driven by N1.4tn in additional revenue from the Federal Inland Revenue Service, N1.2tn from the Nigeria Customs Service, and N1.8tn generated by other government agencies. Following the reading of the letter, Akpabio referred the President’s request to the Senate Committee on Appropriations for urgent consideration.

He also assured lawmakers that the budget would be finalised and passed before the end of February.

Analysts are of the view that it is impromptu increment.

“The budget that should have been operational from January 1, 2025, is still going through the legislative process with changes from the FG.

He said, “If the government was talking about a supplementary budget anytime within the year, that is a different matter than within one to two months; you rush to bring these adjustments.

” It is good, but the proper thing would have been to wait and come up with a supplementary budget. Everything would have been in order if the budget itself had been rounded off at the time it was supposed to and had become effective January 1, 2025.

“Not this situation where they are making additions as afterthoughts. You don’t run a country like that.

” Let me tell you, the figures that they released in December have gone to all parts of the world.

“The world has started doing all that they want to do about Nigeria, on Nigeria, for Nigeria, and with Nigeria based on those figures. We are talking about institutions; analysts all over the world have been using those figures.

“You may not understand the enormity of this move. Because of the mood that we are in now, people may be clapping that FG saw more money and brought it, but that is not how to do a budget. Who says they will not come back again before the National Assembly finishes the job?

“My position is that they should have waited and come up with a supplementary budget.”

Chief Economist and Partner at SPM Professionals, Paul Alaje, also raised concerns about the effect of the increased spending on the inflation target of the federal government, which was 15 per cent.

Alaje said, “I think it is straightforward. Number one, FG is claiming that because some agencies of government are now generating more revenue, therefore, they feel we can spend more.

” Also, I think the real reason is that there seem to be some projects that had been exempted from the 2025 budget, and the government thought it important to add them back to the budget.

“These are some of the factors for the government adding to the 2025 budget, but with this amount in the economy, you should note that the government’s expectation of 15 per cent inflation may remain a mirage.”

Managing Director of Arthur Steven Asset Management Limited, Tunde Amolegbe, sees this as a welcome development that would enable infrastructural growth.

He said, “I have always been an advocate for an ambitious budget because that’s the only way we can improve our grossly inadequate infrastructure before we can even contemplate gravitating towards a productive economy.

“On a per capita basis, if you look at our budget, we are way below that of countries with similar demographics in terms of population and age. How then do we hope to lift our people out of poverty when the government itself isn’t spending enough to raise people’s standard of living?”

Sounding a note of caution, Amolegbe, a former president of the Chartered Institute of Stockbrokers, affirmed that it is important “that we keep our eye on ratios such as debt-to-revenue and debt-to-GDP to ensure we do not tip into over-leveraged territory.”

A leading economist, who spoke on condition of anonymity, faulted the budget proposal raise, saying it would worsen the economy.

He said, ‘”Why would government raise the budget when its deficit is running to almost N16tn. The deficit is hitting up the economy. With all these borrowings here and there, government should have simply reduced the deficit.

” By the way, how are we sure the government will even generate up to the budgeted amount. Over the years, have we been generating enough to meet the revenue target? We don’t have that track record.”

Meanwhile, the House of Representatives has thrown its weight behind President Tinubu’s proposal to the National Assembly to increase the 2025 budget proposal from N49.7tn to N54.2tn, saying the development is driven by additional revenue from key government agencies.

After reading the letter on the floor of the Senate and House of Representatives on Wednesday, Senate President, Godswill Akpabio, and the Deputy Speaker of the House of Representatives, Benjamin Kalu, who presided over plenary sessions at the Red and Green Chambers respectively, referred it to the Committees on Finance and Appropriations for quick consideration.

This is even as the Senate President assured Nigerians that the 2025 budget proposal would be passed before the end of February.