Tinubu presents “Budget of Restoration: Securing Peace, Rebuilding Prosperity,” for 2025

President Bola Ahmed Tinubu on Wednesday presented the 2025 budget, titled “Budget of Restoration: Securing Peace, Rebuilding Prosperity,” to Nigeria’s National Assembly.

High Points of the 2025 Budget:

• Total Expenditure: ₦47.90 trillion, reflecting the administration’s commitment to addressing Nigeria’s economic challenges.

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• Revenue Projections: ₦34.82 trillion, indicating an ambitious drive to enhance government income.

 

• Deficit: ₦13.08 trillion, approximately 3.89% of GDP, to be financed through borrowing.
• Sectoral Allocations:
  • Defence and Security: ₦4.91 trillion, underscoring the priority to combat insecurity.
  • Infrastructure: ₦4.06 trillion, aimed at revitalizing critical national projects.
  • Education: ₦3.52 trillion, reflecting a focus on human capital development.
  • Health: ₦2.48 trillion, to improve healthcare services nationwide.

 

• Economic Projections:
  • Inflation Rate: Targeted reduction from 34.6% to 15% by the end of 2025.
  • Exchange Rate: Improvement from approximately ₦1,700 to ₦1,500 per US dollar.
  • Crude Oil Production: Increase to 2.06 million barrels per day (mbpd).

 

Analysis of the 2024 Budget Performance:

The 2024 budget, titled “Budget of Renewed Hope,” proposed an expenditure of ₦27.5 trillion with an estimated revenue of ₦18.32 trillion.

 

However, implementation faced significant challenges:

• Revenue Shortfalls: Actual revenues lagged behind projections by approximately 21.7% between January and September, attributed to factors like oil production deficits and global economic fluctuations.

 

• Expenditure Gaps: Expenditures fell short by about 48.8% in the same period, reflecting implementation challenges and policy misalignments.

 

• Macroeconomic Instability: Persistent issues such as electricity crises, inflation, and exchange rate volatility hindered economic performance.

 

Possible Outcomes of the Proposed 2025 Budget:

• Economic Growth: If effectively implemented, the budget could stimulate economic activities, reduce inflation, and stabilize the exchange rate, fostering a more conducive environment for investment and development.
• Debt Sustainability Concerns: The projected deficit of ₦13.08 trillion, to be financed through borrowing, raises questions about Nigeria’s debt sustainability and the potential burden on future budgets.
• Sectoral Improvements: Increased allocations to defense, infrastructure, education, and health could lead to tangible improvements in security, public services, and overall quality of life for Nigerians.
• Implementation Challenges: Achieving the ambitious revenue targets and effectively managing expenditures will require robust fiscal discipline, policy coordination, and addressing underlying structural issues in the economy.

In conclusion, while the 2025 budget outlines a comprehensive plan to address Nigeria’s pressing challenges, its success will largely depend on the government’s ability to implement proposed measures effectively and maintain fiscal discipline amidst existing economic constraints.