President Bola Tinubu adjusts the 2025 budget proposal, raising it from N49.7 trillion to N54.2 trillion, attributing the increase to improved revenue inflows from key government agencies.
Tinubu explains in letters to the House of Representatives and the Senate that the budget adjustment is predicated on excess money produced by government agencies.
During plenary sessions, Senate President Godswill Akpabio reads the letters, which highlight the sources of the additional funds, including:
- N1.4 trillion from the Federal Inland Revenue Service (FIRS)
- N1.2 trillion from the Nigeria Customs Service (NCS)
- N1.8 trillion from other government-owned agencies
Legislative Consideration and Approval Process
Following the budget revision, the Senate Committee on Appropriations reviews the proposal. Senate President Akpabio assures lawmakers that the budget will be finalized and passed before the end of February 2025, in line with the government’s commitment to timely fiscal planning.
With deliberations moving forward, attention shifts to how the additional funds will be allocated across key sectors, including infrastructure, social services, and economic development.
Economic Implications
The increased budget reflects a stronger fiscal framework, which could boost investor confidence and drive economic stability. Analysts suggest that higher government spending may enhance service delivery and accelerate development in critical sectors. However, they emphasize the need for efficient implementation and oversight to maximize the benefits of the expanded budget.
Inflation and Exchange Rate Targets
During the budget presentation, Tinubu reiterates his administration’s goal to reduce Nigeria’s inflation rate from 34.6% to 15% by the end of 2025.
“The 2025 budget projects that inflation will decline significantly from 34.6% to 15%,” he states.
Additionally, he pledges to stabilize the exchange rate, projecting an improvement from approximately N1,700 per dollar to N1,500 per dollar.
“These projections are critical for stabilizing the economy and ensuring sustainable growth,” Tinubu adds.
Concerns Over Rising Debt Servicing
Despite the revenue boost, some financial analysts raise concerns over Nigeria’s rising debt servicing costs, which increase from N8 trillion in 2024 to N16 trillion in 2025.
Tilewa Adebayo, CEO of CFG Advisory, warns that the N16 trillion allocated for debt servicing surpasses the combined budget for defence, security, infrastructure, health, and education, which stands at N14 trillion.
“The fiscal strategy presents a red flag because debt servicing at N16 trillion exceeds spending on key sectors,” Adebayo notes.
Stakeholders are still assessing the amended budget’s possible effects on Nigeria’s long-term budgetary sustainability and economic stability as the National Assembly considers it.
