Tinubu Increases 2025 Budget To ₦54.2 Trillion

Federal Government Proposes ₦54.2 Trillion Budget for 2025 Amid Economic Concerns

ABUJA – The Nigerian government has proposed an upward revision of the 2025 national budget to ₦54.2 trillion, marking a 9.1% increase from the initial ₦49.7 trillion presented to the National Assembly on December 18, 2024.

President Bola Ahmed Tinubu formally communicated this adjustment through a letter addressed to the Senate, which was read during a plenary session by Senate President Godswill Akpabio. The letter, titled “2025 Appropriation Bill: Allocation of Additional Revenue of ₦4.53 Trillion,” outlined the sources of the extra funds and their intended allocations.

Sources of Additional Revenue in the 2025 Budget

The budget increase stems from improved revenue generation by key government agencies:

₦1.4 trillion from the Federal Inland Revenue Service (FIRS)
₦1.2 trillion from the Nigeria Customs Service (NCS)
₦1.8 trillion from other government-owned enterprises (GOEs)

With the added revenue, the total 2025 budget size will expand from ₦49.7 trillion to ₦54.2 trillion, which, according to the president, aligns with his administration’s commitment to inclusive growth and economic security.

Proposed Allocation of Additional Funds

The additional ₦4.5 trillion will be directed toward critical sectors, including:

Solid Minerals Development – ₦1 trillion: To boost economic diversification and harness Nigeria’s solid mineral resources.
Bank of Agriculture (BoA) Recapitalization – ₦1.5 trillion: Strengthening agriculture, ensuring food security, and supporting small-scale farmers.
Bank of Industry (BoI) Recapitalization – ₦500 billion: Enhancing support for small and medium-sized enterprises (SMEs) and reducing reliance on imports.
Infrastructure Projects – ₦1.5 trillion, including:
- Irrigation development – ₦380 billion
- Road and rail infrastructure – ₦700 billion
- Border communities infrastructure – ₦50 billion
- Military barracks accommodation – ₦250 billion
- Military aviation projects – ₦120 billion

Concerns Over Inflation and Fiscal Deficit

Despite the government’s optimism, economic experts have raised concerns about the implications of the budget expansion, citing potential risks such as:

Rising fiscal deficits and increased borrowing
Conflict between expansionary fiscal policy and CBN’s monetary tightening measures
Possibility of worsening inflation and exchange rate volatility

Economists Warn Against Fiscal Imbalance

According to David Adonri, Vice Chairman of Highcap Securities Limited, the budget increase could negatively impact macroeconomic stability. He criticized the government’s failure to balance its fiscal policies, warning that excessive public spending amid limited goods supply would exacerbate inflation.

Similarly, Oluwole Adeosun, former President of the Chartered Institute of Stockbrokers (CIS), expressed concerns over the growing budget deficit, currently at ₦13 trillion. While he acknowledged the need for higher government spending, he cautioned that the deficit must be properly managed to avoid excessive public debt accumulation.

Revenue Projections and Overestimation Risks

Public finance analyst Clifford Egbomeade questioned whether the projected revenues from FIRS, Customs, and other agencies were realistic. He warned that revenue underperformance could widen the fiscal deficit, forcing the government to borrow more and worsening economic instability.

Furthermore, Dele Oye, President of the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA), expressed concerns over the lack of clarity regarding the revenue projections. He stressed the need for transparency to ensure that the additional funds are judiciously allocated to productive sectors.

Public Reactions: Economic Hardship on the Rise?

Nigerians have reacted strongly to the budget increase, with many expressing concerns about rising inflation, economic hardship, and government insensitivity.

Entrepreneur Endurance Osibanjo criticized the government’s approach, stating that rather than alleviating economic hardship, policymakers are imposing heavier burdens on citizens. Joshua Ajewole, a publisher, echoed this sentiment, arguing that government policies widen the gap between the rich and the poor.

Similarly, journalist Manoah Kikekon decried the continuous price hikes, stating that the administration is making life more difficult for Nigerians. Public relations expert Iranitiola Olutayo warned that increased government spending without accountability and proper execution could lead to economic stagnation rather than progress.

Conclusion: Will the Budget Increase Benefit Nigerians?

While the ₦54.2 trillion budget aims to stimulate growth, the lack of transparency, revenue concerns, and potential inflationary pressures raise critical questions. Experts argue that for the increased budget to have a meaningful impact, it must be backed by effective fiscal discipline, strategic execution, and a commitment to reducing Nigeria’s debt burden.

The National Assembly is expected to pass the final budget by February 2025, after which President Tinubu will sign it into law. Until then, the debate over its potential impact on Nigeria’s economic future continues.