Former Vice President Atiku Abubakar has criticized the 2025 budget proposal, stating that it is inadequate to address Nigeria’s structural challenges.
In a reaction posted on his verified X handle on Sunday, Atiku said the budget proposal presented to the National Assembly by President Bola Tinubu reflects a continuation of business-as-usual fiscal practices.
Atiku highlighted that the APC-led administration has consistently presented budget deficits since 2016, accompanied by an increasing reliance on external borrowing. He noted that the administration plans to secure over N13 trillion in new borrowings, including N9 trillion in direct borrowings and N4 trillion in project-specific loans. This borrowing strategy, according to Atiku, mirrors previous administrations’ approaches, resulting in rising public debt and exacerbating risks related to interest payments and foreign exchange exposure.
The presidential candidate of the Peoples Democratic Party (PDP) in the 2023 election listed several shortcomings in the budget proposal. He identified weak budgetary foundations in the 2024 budget, leading to underperformance and poor execution. By Q3 of the fiscal year, less than 35% of the allocated capital expenditure for MDAs had been disbursed, despite claims of 85% budget execution. This underperformance in capital spending raises concerns about the execution of the 2025 budget.
Atiku also pointed out a disproportionate debt servicing ratio in the proposed budget, which accounts for N15.8 trillion (33% of the total expenditure), nearly equal to the planned capital expenditure (N16 trillion, or 34%). He noted that debt servicing surpasses spending on key priority sectors such as defense (N4.91 trillion), infrastructure (N4.06 trillion), education (N3.52 trillion), and health (N2.4 trillion). This imbalance, he argued, will likely crowd out essential investments and perpetuate a cycle of increasing borrowing and debt accumulation, undermining fiscal stability.
Atiku criticized the government’s expenditure target as unsustainable, highlighting the disproportionately high recurrent expenditure with over N14 trillion (30% of the budget) allocated to operating an oversized bureaucracy and supporting inefficient public enterprises. He noted that the proposal lacked concrete steps to curb wastage and enhance the efficiency of public spending, which could exacerbate fiscal challenges and leave limited resources for development.
The former presidential candidate also cited insufficient capital investment allocation in the proposed budget. After accounting for debt servicing and recurrent expenditure, the remaining allocation for capital spending, ranging from 25% to 34% of the total budget, is insufficient to address Nigeria’s infrastructure deficit and stimulate growth. This equates to an average capital allocation of approximately N80,000 (US$45) per capita, insufficient to meet the demands of a nation grappling with slow growth and infrastructural underdevelopment.
Atiku dismissed the administration’s tax and economic reforms as regressive, condemning the decision to increase the VAT rate from 7.5% to 10%. He argued that this retrogressive measure will exacerbate the cost-of-living crisis and impede economic growth. 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.
In conclusion, Atiku stated that the 2025 budget lacks the structural reforms and fiscal discipline required to address Nigeria’s multifaceted economic challenges. He urged the administration to prioritize reducing inefficiencies in government operations, tackle contract inflation, and focus on long-term fiscal sustainability rather than perpetuating unsustainable borrowing and recurrent spending patterns. A shift towards a more disciplined and growth-oriented fiscal policy is essential for the nation’s economic recovery.
President Tinubu had presented a budget proposal of N49.7 trillion to the National Assembly for the 2025 fiscal year. The budget proposal had scaled the second reading in the Senate, and further legislative work on the document has been deferred till mid-January.
