The 2023 presidential candidate of the Peoples Democratic Party, Atiku Abubakar, has expressed strong concerns regarding the recently proposed 2025 budget for Nigeria, claiming it lacks the necessary structural reforms and fiscal discipline to effectively address the nation’s pressing economic challenges.
In a statement released on Sunday, Atiku raised doubts about the budget’s ability to promote sustainable growth and resolve ongoing issues. The budget, presented by President Bola Tinubu, amounts to N47.9 trillion, with significant allocations including N4.91 trillion for defense and security, N4.06 trillion for infrastructure, and N2.48 trillion for health and N3.52 trillion for education.
Atiku remarked, “The 2025 budget fails to incorporate the structural reforms and fiscal discipline required to tackle Nigeria’s complex economic issues. The administration must prioritize reducing inefficiencies, addressing inflated contracts, and ensuring long-term fiscal sustainability rather than relying on unsustainable borrowing and recurrent spending.”
He highlighted the concerning financial outlook of the N48 trillion budget, which projects revenues of N35 trillion, leading to a deficit exceeding N13 trillion—approximately 4% of GDP. He pointed out that this trend of budget deficits and heavy borrowing has persisted under the current administration since 2016.
“To fill this gap, the government plans to borrow over N13 trillion, comprising N9 trillion in direct loans and N4 trillion for project-specific financing,” he noted, warning that this approach mirrors previous strategies that have contributed to rising public debt and increased risks associated with interest payments and currency fluctuations.
Atiku cautioned that the budget is likely to fail due to its weak foundations, citing the underperformance of the 2024 budget as evidence. By the third quarter, less than 35% of the capital expenditure had been disbursed, despite claims of 85% execution, undermining confidence in the budget’s viability.
He criticized the disproportionate focus on debt servicing, which amounts to N15.8 trillion, representing 33% of total expenditure, nearly equal to the capital expenditure of N16 trillion. “Debt servicing exceeds allocations for defense, infrastructure, education, and health, crowding out critical investments and exacerbating the debt cycle,” Atiku explained.
Furthermore, he condemned the excessive recurrent spending of N14 trillion, which constitutes 30% of the budget, claiming it perpetuates inefficiencies and supports an oversized bureaucracy. “The failure to eliminate waste limits resources available for developmental needs. With capital investment accounting for only 25% to 34% of the budget, it falls significantly short of addressing Nigeria’s infrastructure deficits,” he added.
Atiku also expressed his disapproval of the proposed increase in VAT from 7.5% to 10%, calling it a regressive decision that would exacerbate economic hardship. “Hiking taxes while neglecting governance inefficiencies will suppress consumption and worsen the cost of living crisis, risking greater economic disparity rather than alleviating it,” he concluded.
