In December 2024, President Bola Ahmed Tinubu presented a N49.

However, on February 5, 2025, he announced an additional N4.5 trillion, raising the total to N54.9 trillion. This increase, driven by additional revenue from key government agencies, has sparked debates on its economic implications.

Breakdown of the 2025 Budget

Out of the N54.9 trillion budget:

• N3.64 trillion is allocated for statutory transfers.
• N14.3 trillion is earmarked for debt servicing.
• N13.06 trillion is set for recurrent non-debt expenditure.
• N23.96 trillion is designated for capital expenditure.

The National Assembly had initially aimed to approve the budget by January 30, 2025. However, due to delays in budget defense sessions, the plenary resumption was postponed to February 4. Following an expedited review process, the Senate passed the budget on February 13, 2025.

Why the Budget Increase?

President Tinubu justified the budget hike with additional revenues generated by:

• Federal Inland Revenue Service (FIRS): N1.4 trillion
• Nigeria Customs Service: N1.2 trillion
• Other government agencies: N1.8 trillion

The revised budget was promptly referred to the Senate Committee on Finance and Appropriations for urgent consideration. Senate President Godswill Akpabio assured that deliberations would conclude before the end of February.

Economic Experts Weigh In

Despite the budget’s approval, economic analysts remain divided. While some see it as a strategic move for growth, others argue that it could fuel inflation if not properly managed.

Potential for Economic Growth

David Etim, President of the Calabar Chamber of Commerce and Industry (CALCCIMA), believes the budget increase could be transformative if directed towards infrastructure.

“If the N5 trillion increment is allocated to infrastructure development, it could be a game-changer, driving economic productivity, job creation, and market expansion,” Etim stated.

He also expressed optimism about the government's plan to reduce inflation to 24 percent in the short term and 15 percent in the long run through strategic investment.

Daniel Dickson-Okezie, an SME expert and member of the Lagos Chamber of Commerce and Industry (LCCI), emphasized the need for a shift towards capital expenditure.

“In developed economies, budgets prioritize infrastructure over recurrent expenses. Nigeria must follow suit to ensure sustainable economic development,” he remarked.

Concerns Over Inflation and Misallocation

Not all stakeholders are optimistic. Former House of Representatives member Yusuf Mohammed criticized the decision to channel additional revenue into the 2025 budget instead of ensuring 100% implementation of the 2024 budget.

“The 2024 budget implementation reportedly stands at 60 percent. Why not use the additional funds to complete existing projects rather than pushing them into 2025?” Mohammed argued.

He also pointed out that uncompleted projects, cost overruns, and inflationary pressures could undermine the impact of the increased budget.

The Politics Behind the Budget Expansion

Some analysts believe that the budget hike is a political strategy rather than an economic necessity.

“The President and his team are playing politics, creating the perception of transparency and economic prudence,” Mohammed asserted. “The National Assembly has always adjusted revenue projections to suit political narratives.”

What’s Next? Economic Growth or Inflationary Pressures?

As the government moves forward with implementing the 2025 budget, the execution strategy will determine its impact. If funds are strategically invested in infrastructure, they could stimulate economic growth, create jobs, and stabilize inflation.

However, if misallocated toward recurrent expenditures, it may exacerbate inflation and economic instability.

Final Thoughts

The success of the N54.9 trillion budget depends on proper implementation and fiscal discipline. With high expectations from Nigerians, the government must ensure that spending aligns with developmental priorities to lift citizens out of economic hardship and drive national prosperity.

What do you think? Will the 2025 budget boost Nigeria’s economy or increase inflation? Let’s discuss in the comments!