The Nigerian Senate has officially passed the 2025 Appropriation Bill, approving a record-breaking budget of N54.99 trillion on Thursday. This budget, which includes allocations for statutory transfers, recurrent and capital expenditures, and debt servicing, represents a significant increase from the initial proposal presented by President Bola Tinubu.
Key Highlights of the 2025 Budget
The approved budget breakdown is as follows:
– **Total Expenditure:** N54.99 trillion
– **Statutory Transfers:** N3.65 trillion
– **Recurrent (Non-Debt) Expenditure:** N13.64 trillion
– **Capital Expenditure:** N23.96 trillion
– **Debt Servicing:** N14.32 trillion
– **Fiscal Deficit:** N13.08 trillion
– **Deficit-to-GDP Ratio:** 1.52%
The budget is designed to stimulate economic growth, improve infrastructure, and address fiscal challenges, despite concerns over Nigeria’s rising debt profile.
### Increase in Budget Size
President Tinubu initially proposed a N49.7 trillion budget for 2025. However, following revised revenue projections from key government agencies, the figure was adjusted upward to N54.2 trillion on February 5, 2024. After extensive deliberations in the National Assembly, the final approved budget was set at N54.99 trillion.
Senate President Godswill Akpabio explained that the increase was justified by new revenue inflows from key agencies, which are expected to bolster the fiscal framework for 2025.
Sources of Additional Revenue
In a letter to the Senate and the House of Representatives, President Tinubu outlined the sources of the additional revenue:
– **Federal Inland Revenue Service (FIRS):** N1.4 trillion
– **Nigeria Customs Service (NCS):** N1.2 trillion
– **Other Government Agencies:** N1.8 trillion
These additional funds are expected to bridge fiscal gaps and finance critical infrastructure projects.
Legislative Approval Process
The House of Representatives had earlier approved the N54.99 trillion budget, paving the way for Senate confirmation. With the Senate’s approval, the bill now awaits presidential assent to become law.
Economic Implications
While the budget prioritizes capital investments, with N23.96 trillion earmarked for capital projects—the highest in recent years—analysts have raised concerns about the fiscal deficit, estimated at N13.08 trillion, and the rising debt servicing costs. At N14.32 trillion, debt servicing accounts for a significant portion of the budget, potentially limiting funds available for infrastructure and social programs.
Despite these concerns, the government remains optimistic that increased revenue collection and economic reforms will address these challenges.
Presidential Commitments
During the budget presentation, President Tinubu reiterated his administration’s commitment to reducing Nigeria’s inflation rate from 34.6% to 15% by the end of 2025. He also pledged to stabilize the exchange rate at N1,500 per dollar, down from the current rate of approximately N1,700 per dollar.
“These projections are critical for stabilizing the economy and ensuring sustainable growth,” Tinubu stated.
Analysts’ Concerns
Some economic experts have expressed reservations about the fiscal direction of Tinubu’s administration. Tilewa Adebayo, CEO of CFG Advisory, described the increase in debt servicing from N8 trillion in 2024 to N16 trillion in 2025 as a “red flag.”
“Debt service at N16 trillion is more than the combined allocations for Defence, Security, Infrastructure, Health, and Education, which total N14 trillion,” Adebayo noted.
Bottom Line
The 2025 budget reflects the government’s ambitious plans to drive economic growth and address infrastructure deficits. However, the rising debt burden and fiscal deficit remain significant challenges that will require careful management to ensure long-term economic stability.
As the budget awaits presidential assent, stakeholders will be closely monitoring its implementation and its impact on Nigeria’s economic trajectory.
