2025 budget largest in Nigeria’s history — ACHR

mine · 19 December 2024 13:47

2025 budget largest in Nigeria’s history — ACHR

by Nurudeen Alimi
date - December 19, 2024
Source - Nigeria Tribune. Here
Reading Time: 2 mins read
FGN 2025 Budget Call Circular.pdf (1.4 MB)

The African Centre for Human Rights (ACHR) has described the 2025 budget presented to the National Assembly by President Bola Ahmed Tinubu as the largest in the history of Nigeria, which it said reflects a strategic and forward-thinking approach.

Titled “Budget of Restoration: Securing Peace, Rebuilding Prosperity,” the N47.96 trillion budget is being hailed as a bold and comprehensive blueprint to address Nigeria’s most pressing challenges, which is believed to set the nation on a path to sustainable growth.

ACHR Executive Director, Dr Richard Ikani, said in a statement that President Tinubu’s 2025 budget, which is the largest in Nigeria’s history, reflects a strategic and forward-thinking approach to the country’s economic recovery.

He further said, “One of the central themes of the budget is to restore macroeconomic stability, a crucial step given Nigeria’s current challenges of high inflation and exchange rate volatility. With inflation currently exceeding 34 per cent, the government has taken the bold step to set a target to reduce inflation to 15 per cent by the end of 2025—a goal that many economists believe could help stabilise prices and increase the purchasing power of ordinary Nigerians.”

Ikani pointed out: “The President’s emphasis on stabilising the exchange rate is another key feature of the budget. Projections indicate that the naira will strengthen to N1,500 to $1, a significant improvement from the current exchange rate, which hovers around N1,700 to $1. This move, experts say, will help stabilise Nigeria’s financial system, promote investor confidence, and facilitate trade.

“Another notable aspect of the 2025 budget is the ambitious revenue target of N34.82 trillion, reflecting a determined effort by Mr. President to increase government revenue. Nigeria has long struggled with a low revenue-to-GDP ratio over time, and this budget seeks to reverse that trend for the best. The administration’s plan to increase oil production to 2.06 million barrels per day and broaden the tax base through improved tax collection is seen as a necessary step in achieving these goals. While the revenue target is challenging, President Tinubu has made it clear that these efforts are essential to reducing Nigeria’s dependence on external debt and ensuring the sustainability of public services.”

Miracle_Heroes · 25 December 2024 12:53

Massive! Though low impact on the citizens.

SecGen · 25 December 2024 21:05

To ChatGPT

What’s the total size and top level sectoral breakdown of Nigeria’s federal budget in Naira and in US dollar equivalent, from 1999 to 2025? Analyse the trend and the prognosis.

Answer

Analyzing Nigeria’s federal budgets from 1999 to 2025 reveals significant growth and shifts in sectoral allocations, reflecting the nation’s evolving economic priorities and challenges.

Total Budget Size (1999-2025):
• 1999: Approximately ₦299 billion.
• 2000: ₦677 billion.
• 2005: Surpassed ₦1 trillion, reaching ₦1.35 trillion.
• 2010: ₦3.93 trillion.
• 2015: ₦4.49 trillion.
• 2016: ₦6.07 trillion.
• 2018: ₦9.12 trillion.
• 2024: Initially proposed at ₦27.5 trillion, later increased to ₦35.5 trillion.
• 2025: Proposed at ₦47.96 trillion.

This progression indicates a substantial increase in budget size over the years, with notable accelerations in recent times.

Sectoral Allocations:
• Security and Defense: Consistently a significant portion, with ₦4.91 trillion allocated in 2025, underscoring ongoing security challenges.
• Infrastructure: ₦4.06 trillion in 2025, emphasizing the government’s focus on development.
• Education: ₦3.52 trillion in 2025, reflecting a commitment to human capital development.
• Health: ₦2.48 trillion in 2025, highlighting efforts to improve healthcare services.

Exchange Rate Considerations:

Converting these figures to U.S. dollars requires considering the prevailing exchange rates, which have fluctuated significantly. For instance:
• 2000: Approximately ₦85 to $1.
• 2010: Around ₦150 to $1.
• 2024: Approximately ₦700 to $1.
• 2025: Projected at ₦1,500 to $1.

These fluctuations impact the dollar-equivalent value of the budgets.

Trends and Prognosis:

The increasing budget sizes reflect Nigeria’s attempts to address various challenges, including security, infrastructure deficits, and human capital development. However, the growing budget deficit, projected at ₦13.08 trillion (3.89% of GDP) in 2025, raises concerns about fiscal sustainability.

Additionally, the depreciation of the naira increases the cost of imports and debt servicing, potentially exacerbating economic challenges.

Conclusion:

While Nigeria’s federal budgets have expanded to address critical sectors, the nation faces challenges related to fiscal deficits and currency depreciation. Effective implementation of budgetary allocations, coupled with strategies to enhance revenue generation and stabilize the currency, will be crucial for sustainable economic growth.

SecGen · 25 December 2024 21:05

US dollar equivalents

To provide the US dollar equivalents for Nigeria’s federal budgets from 1999 to 2025, I’ll use estimated average exchange rates for each period. Note that exchange rates fluctuate, so these are approximate figures. Here’s the breakdown:

Federal Budgets and US Dollar Equivalents (1999–2025)

Year Budget (₦ Billion) Exchange Rate (₦ to 1) Budget (US Billion)

1999 299 85 3.52

2000 677 85 7.96

2005 1,350 130 10.38

2010 3,930 150 26.20

2015 4,490 200 22.45

2016 6,070 250 24.28

2018 9,120 305 29.87

2024 35,500 700 50.71

2025 47,960 1,500 31.97

Analysis of Trends

Budget Growth: The federal budget has grown from ₦299 billion in 1999 to ₦47.96 trillion in 2025, reflecting Nigeria’s increasing economic ambitions and spending needs.
Currency Depreciation: The naira has significantly depreciated over the years, affecting the dollar equivalent of these budgets. For example:

• In 1999, the exchange rate was ₦85 to $1.

• By 2025, it is projected to reach ₦1,500 to $1.

US Dollar Value Fluctuations: Despite increasing budget figures in naira, the dollar equivalent doesn’t show consistent growth due to the naira’s depreciation. For instance:

• 2010: $26.2 billion.

• 2025: $31.97 billion—only a modest increase over 15 years.

Impact of Exchange Rates: The declining value of the naira reduces the real purchasing power of these budgets in global markets, making it more expensive for Nigeria to fund imports and service foreign debts.

Prognosis

Revenue Challenges: Nigeria needs to diversify its revenue sources to reduce dependency on oil, which is vulnerable to price volatility.
Sectoral Focus: The rising allocations to education, infrastructure, and healthcare indicate a push toward addressing fundamental challenges, but efficient use of funds is critical.
Inflation and Debt Management: With a projected budget deficit of ₦13.08 trillion in 2025, careful management of public debt and inflation will be crucial.
Stabilizing the Naira: Policies to stabilize the currency will directly enhance the effectiveness of federal budgets, especially for capital-intensive projects with international components.

Would you like more details on the sectoral allocations or economic implications?

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