Former Vice-President Atiku Abubakar has criticized Nigeria’s proposed 2025 budget, calling it insufficient to address the nation’s economic challenges and promote sustainable growth.
In a statement on Sunday, Abubakar described the budget as a continuation of “business-as-usual” fiscal practices that increase Nigeria’s external debt burden.
He highlighted that the proposed 2025 federal budget, totaling N48 trillion with a revenue forecast of N35 trillion, would result in a deficit exceeding N13 trillion, about 4% of GDP.
Abubakar noted this as part of a persistent trend under the APC-led administration since 2016, where budget deficits have been the norm, accompanied by rising external borrowing. To bridge the fiscal gap, the administration plans to secure over N13 trillion in new borrowings, including N9 trillion in direct borrowings and N4 trillion in project-specific loans.
Abubakar argued that this borrowing approach mirrors those of past administrations, further increasing public debt and compounding risks tied to interest payments and foreign exchange exposure.
Pointing out flaws in the proposed budget, Abubakar mentioned the “weak budgetary foundations” and underperformance in the execution of the 2024 budget.
He noted that by the third quarter of the fiscal year, less than 35% of the capital expenditure for MDAs had been disbursed, despite claims of 85% budget execution. This underperformance, he argued, raises doubts about the successful implementation of the 2025 budget.
He also criticized the budget for allocating a disproportionate amount to debt servicing. Abubakar stated that N15.8 trillion, or 33% of the total expenditure, is dedicated to debt servicing, which is nearly equal to the planned capital expenditure of N16 trillion (34%). He pointed out that debt servicing surpasses funding for vital sectors like defence (N4.91 trillion), infrastructure (N4.06 trillion), education (N3.52 trillion), and health (N2.4 trillion). This imbalance, he warned, could crowd out necessary investments and perpetuate a borrowing cycle that threatens fiscal stability.
Abubakar further expressed concerns over unsustainable government expenditure, citing that over N14 trillion, or 30% of the budget, is allocated to running a large bureaucracy and supporting inefficient public enterprises. This inefficiency, he said, leaves little room for critical development and infrastructure investments.
Regarding capital investment, Abubakar noted that the allocation, ranging from 25% to 34% of the total budget, falls short of addressing Nigeria’s significant infrastructure deficit. He stated, “It amounts to an average capital allocation of about N80,000 ($45) per capita, insufficient to meet the demands of a country grappling with slow growth and infrastructural underdevelopment.”
Abubakar also criticized the government’s decision to increase the VAT rate from 7.5% to 10%, calling it a “regressive measure” that will worsen the cost-of-living crisis. He warned that imposing additional tax burdens on an already struggling population, without addressing governance inefficiencies, could suppress domestic consumption and worsen economic hardship.
In conclusion, Abubakar argued that the 2025 budget lacks the structural reforms and fiscal discipline needed to tackle Nigeria’s economic issues.
He stated, “To enhance the budget’s credibility, the administration must prioritize the reduction of inefficiencies in government operations, tackle contract inflation, and focus on long-term fiscal sustainability rather than perpetuating unsustainable borrowing and recurrent spending patterns.” He emphasized that a shift toward a disciplined and growth-oriented fiscal policy is essential for Nigeria’s economic recovery.
