The 2025 Nigerian Federal Budget, themed “Budget of Restoration: Securing Peace, Rebuilding Prosperity,” proposes a substantial N49.70 trillion spending plan, representing a significant increase compared to previous years. A considerable portion of this budget is allocated to personnel and pension costs, amounting to N8.52 trillion, a 59.16% increase from the N5.35 trillion allocated in 2024. This rise is primarily driven by a N2.75 trillion surge in salary payments, reaching a total of N7.54 trillion. The combined allocation for personnel, pensions, and debt servicing consumes N24.85 trillion, representing over half (53.98%) of the total budget. Notably, debt servicing alone, at N16.33 trillion, surpasses the combined allocation for personnel and pensions, highlighting the significant financial burden of Nigeria’s debt obligations.
A deeper examination of the budget reveals specific allocations within various sectors. The State House budget includes provisions for vehicle maintenance and procurement, including N15.09 billion for tire purchases and vehicle replacements, along with N5.49 billion for general maintenance of the Presidential Villa. Additional allocations within the State House budget cover operational vehicles for various officials, including the President, Vice President, and Chief Security Officer. Furthermore, N2.12 billion is earmarked for honoraria and sitting allowances, and N1.83 billion is allocated for constructing office complexes for Special Advisers and Senior Special Assistants.
The health sector also receives significant attention in the proposed budget, with a combined allocation of N21.04 billion for the Medical and Dental Council of Nigeria (MDCN), the Nursing and Midwifery Council of Nigeria (NMCN), and the Pharmacy Council of Nigeria (PCN). The MDCN receives the largest share at N18.11 billion, followed by the PCN with N1.92 billion and the NMCN with N1.01 billion. This allocation contradicts a previous government announcement from 2023 stating the intention to discontinue budgetary allocations to professional bodies and councils by December 2024 and December 2026 for other bodies, aiming to transition them into self-funded organizations. The rationale behind this shift, as communicated by the Budget Office of the Federation, was to align with the decisions of the Presidential Committee on Salaries.
The agricultural sector, crucial for food security and economic development, receives an allocation of N636 billion within the proposed budget. Of this, N54.38 billion, representing 8.4%, is earmarked for Federal Universities of Agriculture across the country. These funds are intended to support education, research, and development within the agricultural sector, aligning with the government’s overall focus on human capital development and infrastructure improvement. This allocation is seen as a positive step towards addressing food security challenges and leveraging the expertise of agricultural universities to contribute to national development.
Expert analysis of the agricultural allocation suggests that while the amount is a positive step, strategic implementation is crucial for maximizing impact. The potential of these universities to address food security, reduce food costs, and contribute to national development is significant, particularly given their vast land resources and skilled manpower. However, concerns remain about past underperformance and the need to effectively utilize these resources to meet the intended objectives. Specific areas of focus include boosting food production, establishing critical infrastructure like processing industries and hatcheries, and leveraging the expertise of specialists within the universities.
The ambitious budget, while prioritizing critical sectors like defense, infrastructure, and human capital development, also carries a projected deficit of N13.39 trillion, which is planned to be financed through borrowing. This reliance on borrowing raises concerns about the long-term sustainability of the budget and the potential impact on future debt servicing costs. The government’s economic projections, including a significant reduction in inflation and improvement in the naira exchange rate, are crucial for the success of the budget and the achievement of its objectives. Stakeholders emphasize the importance of efficient implementation and strategic allocation of resources to ensure that the budget delivers on its promises and contributes to sustainable economic growth and development in Nigeria.
Despite the significant increase in the overall budget and the allocations to specific sectors, the substantial debt servicing cost and the reliance on borrowing raise concerns about fiscal sustainability. The government’s commitment to strengthening security, revamping infrastructure, and prioritizing human capital development is evident in the budget allocations. However, successful implementation, efficient resource management, and the realization of the projected economic improvements are crucial for achieving the budget’s goals and ensuring its long-term impact on Nigeria’s economic development. The ambitious nature of the budget, coupled with the significant challenges it aims to address, necessitates careful monitoring, evaluation, and adjustments to ensure its effectiveness in achieving the desired outcomes.
