Tinubu Proposes N54.6 Trillion Budget for 2025: Implications for Nigeria’s Economy and Growth
On February 6, 2025, President Bola Tinubu proposed a budget increase for Nigeria, raising the 2025 budget from N49.7 trillion to N54.6 trillion. This 9.77% rise seeks to stimulate economic growth through increased government spending. While expansionary budgets can promote growth, experts caution that without careful management, they can also lead to inflation. The additional budget would be funded through revenue generated by key government agencies, which the government hopes will prevent inflationary risks by avoiding reliance on the Central Bank for financing.
A key factor in this proposal is the effective allocation of the additional N4.86 trillion. Economists believe that spending on critical infrastructure such as roads, power, and healthcare could boost economic growth and create jobs. However, if this money is spent inefficiently on recurrent expenditures or frivolous projects, the benefits might be lost. Experts also raised concerns about whether agencies like the Federal Inland Revenue Service (FIRS) and Nigeria Customs Service (NCS) are expanding the tax base and whether Nigerian citizens and businesses will bear more of the budget’s financial burden.
Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, argued that the proposed increase would not necessarily trigger inflation if it is funded through taxation and resource revenue rather than new money printing. This perspective aligns with Keynesian economics, which advocates for government spending during economic slowdowns, provided the resources are wisely allocated and transparency is maintained in the process.
The Senate is expected to review the budget proposal, which includes provisions for significant infrastructural investments, military expenditure, and developmental projects. Tinubu specifically earmarked funds for sectors like solid minerals, agriculture, industry, transportation, and security. The President emphasized that ensuring national security through military investments is essential for a stable and prosperous economy, outlining how this spending aligns with his vision for a safer and more secure Nigeria.
Finally, while the increase in the budget could signal positive economic prospects, the ultimate outcome depends on the government’s ability to implement the plan effectively. If executed properly, it could lead to improvements in Nigeria’s infrastructure, healthcare, and security, ultimately boosting public trust and fostering long-term economic stability. However, any misallocation or inefficiency could further strain the nation’s economic challenges.
Source: BUSINESS DAY