2025 National Budget: Nigeria Needs A $280 Billion Budget For Its Population Of 200 Million

Discover the TUC President’s insights on Nigeria’s 2025 budget, economic challenges, and the urgent need for a $280 billion budget to drive sustainable development.

Comrade Festus Osifo, the President of the Trade Union Congress of Nigeria (TUC) and National President of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), shares insights on Nigeria’s economic challenges and offers potential solutions in this comprehensive interview with Christian Appolos.

Key Achievements of the Labour Movement in 2024

Reflecting on 2024, Comrade Osifo highlights several milestones achieved by the labour movement, with the increase in the national minimum wage standing out. The wage was raised from ₦30,000 to ₦70,000—a 133% increment. While this falls short of labour’s expectations, it was a commendable achievement given the prevailing economic difficulties, including inflation, naira devaluation, and the removal of fuel subsidies, which have eroded the purchasing power of workers.

Additionally, the Trade Union Congress (TUC) and its affiliates negotiated numerous collective agreements behind closed doors. In the oil and gas sector, for example, some branches secured remuneration increases of up to 200% without resorting to industrial actions. These successes, though largely unpublicized, underscore the labour movement’s effectiveness in 2024.

Ensuring Compliance with the ₦70,000 Minimum Wage

Labour has made significant strides in ensuring compliance with the new minimum wage. Within six months of its implementation, several states have already signed agreements and begun payment. For states lagging, high-level discussions are ongoing, and in 2025, TUC aims to hold all states accountable. Where necessary, directives will be issued to members to enforce compliance.

Functional Refineries: Will Fuel Prices Drop?

The TUC has long advocated for the revitalization of Nigeria’s refineries, such as those in Port Harcourt and Warri. However, Osifo explains that fuel prices are largely determined by the exchange rate. For instance, even as Dangote Refinery commenced production, fuel prices remain tied to the fluctuating cost of crude oil and the exchange rate. If the naira strengthens, fuel prices could drop significantly. For example, a ₦1000/USD exchange rate could reduce fuel prices to approximately ₦400-₦600 per litre.

The National Budget and Borrowing Concerns

The 2025 budget is set at ₦49.76 trillion, approximately $82 billion based on a projected exchange rate of ₦1500/USD. While this represents a nominal increase from 2024’s budget of ₦27.5 trillion ($38 billion at ₦700/USD), the devaluation of the naira means the real value has diminished.

Comrade Osifo points out that Nigeria’s budget is disproportionately low for a country of over 200 million people. South Africa, with a smaller population, has a budget of approximately $128 billion. He argues that Nigeria’s budget should be at least $250 billion to address critical sectors like education, healthcare, and defense.

The heavy reliance on borrowing to finance the budget is another concern. With ₦13 trillion earmarked for borrowing and ₦15 trillion allocated to debt servicing, the nation’s finances are increasingly strained. Osifo emphasizes the need to boost revenue generation to reduce the growing deficit and avoid a cycle of unsustainable debt.

Expanding Revenue Sources

Osifo stresses that Nigeria’s vast natural resources remain underutilized. From bitumen deposits in Ondo to gold in Zamfara, the country has untapped wealth that could significantly boost revenue. He calls for partnerships between the government and private sector to harness these resources.

Furthermore, the gas sector presents enormous potential. Nigeria has some of the world’s largest gas reserves, yet projects like the Brass LNG remain stalled. Expanding the gas industry could replicate the success of the NLNG in Bonny and generate substantial revenue.

Regarding taxation, Osifo advocates for broadening the tax net rather than increasing rates. With only 5% of Nigerians paying taxes and VAT collection efficiency below 10%, improving tax administration could yield significant returns.

Turning Nigeria’s Economy Around in 2025

Osifo identifies the exchange rate as a critical factor in alleviating Nigeria’s economic woes. He suggests that the government implement policies to strengthen the naira, aiming for an exchange rate of ₦1000-₦1200/USD. This would directly lower the cost of goods and services, easing the burden on citizens.

Additionally, the government must prioritize food security through massive investments in agriculture. Collaborative efforts between federal, state, and local governments are essential to encourage farming and ensure nationwide food production. Ensuring security across the country is also critical to achieving these goals.

Conclusion

Comrade Osifo’s insights underscore the urgent need for Nigeria to adopt bold and innovative measures to address its economic challenges. By increasing revenue, strengthening the naira, and making strategic investments in critical sectors, the nation can chart a path toward sustainable development and improved living standards for its citizens.