Former Vice-President Atiku Abubakar has criticized the 2025 federal budget, describing it as inadequate to address Nigeria’s pressing structural challenges. With a total allocation of N48 trillion and a revenue forecast of N35 trillion, the budget presents a deficit exceeding N13 trillion, or 4% of the country’s GDP.
According to Atiku, this budget continues the trend of business-as-usual fiscal practices under the APC-led administration, characterized by persistent budget deficits and an increasing reliance on external borrowing.
The government plans to raise over N13 trillion in new borrowings, including N9 trillion in direct borrowings and N4 trillion in project-specific loans, echoing strategies from previous administrations.
Atiku warned that this borrowing approach has resulted in rising public debt, which poses significant risks due to interest payments and foreign exchange exposure. He questioned the budget’s ability to foster sustainable economic growth and address the nation’s deep-rooted challenges, citing several key concerns.
One major issue, according to Atiku, is the weak budgetary foundation evidenced by the underperformance of the 2024 budget. By the third quarter of the fiscal year, less than 35% of the allocated capital expenditure for Ministries, Departments, and Agencies (MDAs) had been disbursed, despite claims of 85% budget execution.
When Celebrating Christmas Becomes A Target: The Unyielding Hostility of Some Fanatics
Atiku stated, “This underperformance in capital spending, crucial for fostering economic transformation, raises concerns about the execution of the 2025 budget.”
Another critical issue raised was the disproportionate allocation to debt servicing. With N15.8 trillion (33% of total expenditure) dedicated to servicing the national debt, the amount is nearly equal to the planned capital expenditure of N16 trillion. Moreover, debt servicing surpasses spending on vital sectors like defense, infrastructure, education, and health, likely crowding out necessary investments and perpetuating a cycle of debt accumulation, thereby undermining fiscal stability.
Atiku noted, “Debt servicing… will likely crowd out essential investments and perpetuate a cycle of increasing borrowing and debt accumulation, undermining fiscal stability.”
Atiku also expressed concern over the government’s unsustainable recurrent expenditure, which takes up over N14 trillion (30% of the budget).
He criticized the large bureaucracy and inefficient public enterprises, arguing that without concrete steps to curb waste and enhance public spending efficiency, there would be little room left for development and growth.
“The lack of concrete steps to curb wastage and enhance the efficiency of public spending exacerbates the fiscal challenges, leaving limited resources for development,” he stated.
The former vice-president also highlighted insufficient capital investment, as only 25% to 34% of the total budget is allocated for infrastructure, a sum far too low to address Nigeria’s infrastructure deficit. This equates to roughly N80,000 (US$45) per capita, a figure that cannot meet the needs of a nation struggling with slow economic growth and inadequate infrastructure.
Additionally, Atiku condemned the increase in the VAT rate from 7.5% to 10%, labeling it a regressive measure that would exacerbate the cost-of-living crisis and stifle economic growth.
He argued, “By imposing additional tax burdens on an already struggling populace while failing to address governance inefficiencies, the government risks stifling domestic consumption and further deepening economic hardship.”
Atiku Abubakar emphasized that the 2025 federal budget fails to address the structural reforms and fiscal discipline necessary for Nigeria’s economic recovery. He urged the government to focus on reducing inefficiencies, tackling contract inflation, and prioritizing long-term fiscal sustainability, rather than perpetuating unsustainable borrowing and recurrent spending practices. “A shift towards a more disciplined and growth-oriented fiscal policy is essential for the nation’s economic recovery,” he said.
