The National Assembly on Thursday passed the 2025 Appropriation Bill, approving a record N54.99 trillion budget. The budget allocates N14.32 trillion for debt servicing and N13.64 trillion for recurrent expenditures, including salaries, overheads, and government operations. While economists and members of the Organised Private Sector (OPS) commended the budget’s focus on economic growth, they expressed concerns over its funding and potential inflationary impact.
Key Allocations
The budget breakdown includes:
– **Debt Servicing:** N14.32 trillion
– **Recurrent Expenditure:** N13.64 trillion
– **Capital Expenditure:** N23.96 trillion
– **Statutory Transfers:** N3.655 trillion
– **Fiscal Deficit:** N13.06 trillion
The initial proposal of N54.2 trillion was increased by N700 billion following recommendations from the House and Senate Committees on Appropriations. The increase was attributed to additional revenue projections from the Federal Inland Revenue Service (FIRS), Nigeria Customs Service (NCS), and other government agencies.
Lawmakers’ Approval
Senate President Godswill Akpabio announced the budget’s passage after a majority of senators supported it through voice votes. The Chairman of the Senate Committee on Appropriations, Adeola Olamilekan, presented the report, recommending allocations for statutory transfers, debt servicing, capital expenditure, and fiscal deficit.
President Bola Tinubu had earlier requested an upward revision of the budget from N49.7 trillion to N54.2 trillion, citing additional revenue from FIRS (N1.4 trillion), NCS (N1.2 trillion), and other agencies (N1.8 trillion). The approved budget now stands at N54.99 trillion.
Sectoral Allocations
The budget includes significant allocations for critical sectors:
– **Solid Minerals:** N1 trillion
– **Bank of Agriculture Recapitalisation:** N1.6 trillion
– **Infrastructure Projects:** N5 trillion
– **Light Rail Networks:** N400 billion
– **Military Barracks and Aviation:** N250 billion and N120 billion, respectively
– **Border Communities:** N50 billion
The National Assembly allocated N344.85 billion to itself, while other key agencies received substantial funding:
– **National Judicial Council:** N521.63 billion
– **Niger Delta Development Commission:** N626.53 billion
– **Independent National Electoral Commission (INEC):** N140 billion
Concerns Over Funding and Inflation
Economists and private sector stakeholders have raised concerns about the budget’s funding and its potential to exacerbate inflation. Johnson Chukwu, Group Managing Director of Cowry Assets Management Limited, noted that the budget’s expansionary nature could stimulate economic growth but warned of inflationary pressures.
“An expansionary budget is a stimulus budget. It means the government wants to inject liquidity into the hands of consumers by creating jobs and consumption to trigger economic recovery. However, with inflation already at 34.8%, this budget could worsen inflationary pressures and exchange rate instability,” Chukwu explained.
Dr. Ayo Teriba, CEO of Economic Associates, echoed these concerns, emphasizing the need for the government to focus on funding the budget without resorting to excessive borrowing. He warned that failure to meet revenue targets could force the government to borrow from the Central Bank of Nigeria (CBN), further fueling inflation.
Infrastructure and Regional Concerns
During the budget debate, lawmakers highlighted regional disparities in infrastructure allocations. Chinedu Ogar, a member representing Ikwo/Ezza South Federal Constituency, Ebonyi State, pointed out the absence of rail projects in the South-East.
“We are talking about light rail projects connecting Kaduna, Lagos, and Ogun States, but the South-East region is not captured,” Ogar stated.
In response, Speaker Tajudeen Abbas assured that the observation would be brought to the President’s attention, with the possibility of addressing the issue in a supplementary budget.
Bottom Line
The N54.99 trillion budget reflects the government’s ambitious plans to drive economic growth and address infrastructure deficits. However, the high allocation for debt servicing and concerns over funding sources pose significant challenges. Economists have urged the government to prioritize revenue generation and avoid excessive borrowing to mitigate inflationary risks.
As the budget awaits presidential assent, stakeholders will be closely monitoring its implementation and its impact on Nigeria’s economic trajectory. The government’s ability to meet its revenue targets and manage fiscal pressures will be critical to the budget’s success.
