Mixed reactions have greeted President Bola Ahmed Tinubu’s N49.7 trillion 2025 budget proposal presented to the National Assembly on Wednesday. The proposal marks a significant increase from the N30.94 trillion budgeted for 2024.
The budget allocates substantial funds to key sectors: Defence and Security (N4.91 trillion), Infrastructure (N4.06 trillion), Education (N3.52 trillion), and Health (N2.48 trillion). It is based on key assumptions, including a 4.6% GDP growth, inflation reduction to 15.75%, an exchange rate of N1,500 per dollar, oil production at 2.06 million barrels per day, and crude oil priced at $70 per barrel. Additionally, the budget targets N36.36 trillion in revenue while projecting a deficit of N13.39 trillion.
Economists and financial analysts have offered differing views on the budget’s priorities and projections. Speaking in separate interviews, Muda Yusuf, Chief Executive of the Centre for the Promotion of Private Enterprise, and Professor Godwin Oyedokun of Lead City University provided insights into the proposal’s strengths and weaknesses.
Yusuf commended the focus on Defence and Security, Infrastructure, Health, and Education, stating these align with the country’s current economic and social challenges. He described the budget’s priorities as laudable and indicative of a commitment to addressing critical issues impeding economic performance. Yusuf highlighted the President’s optimism about economic revitalization, grounded in assumptions such as reduced fuel importation, increased export of refined petroleum products, improved agricultural output due to better security, and enhanced foreign exchange inflows. While he viewed these assumptions as achievable pathways to growth, he emphasized the need for unwavering political, policy, and resource commitments to realize these goals.
However, Yusuf raised concerns about the N15 trillion earmarked for debt servicing, calling it a major fiscal risk for 2025. He also flagged the ambitious revenue projection of N34.82 trillion, warning against excessive taxation on investors to meet this target. Additionally, he stressed the need for systemic policies to mitigate the social costs of current reforms, especially for vulnerable populations.
Professor Oyedokun offered a more critical perspective, describing some key assumptions in the budget as unrealistic. He pointed to the proposed exchange rate of N1,500 per dollar, noting that the parallel market rate is significantly higher, which could lead to further devaluation, rising import costs, and increased inflation. He also criticized the $75 per barrel crude oil price benchmark as overly optimistic, given global market volatility and geopolitical uncertainties. Furthermore, he expressed skepticism about achieving the projected oil production of 2.06 million barrels per day due to challenges such as oil theft, pipeline vandalism, and aging infrastructure.
Oyedokun also questioned the allocation of the largest budget share to defence, suggesting a need for a better balance between security and human development. He highlighted a N13 trillion health sector deficit as alarming, given the nation’s pressing healthcare challenges. Despite the budget’s focus on infrastructure, he argued that its impact on ordinary Nigerians remains uncertain, citing persistent issues like poor electricity supply, inadequate healthcare, and high unemployment rates.
To address these concerns, Oyedokun recommended adjusting economic assumptions, diversifying revenue sources beyond oil, improving tax collection efficiency, prioritizing human capital development, combating corruption, and focusing on sustainable development. He emphasized that the government must implement realistic policies to improve the lives of Nigerians effectively.
Meanwhile, Bismark Rewane, Chief Executive of Financial Derivatives, expressed optimism in an interview with Channels Television, stating that the budget has the potential to make 2025 a better year for Nigerians if implemented effectively.
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