N54tn budget: Experts divided over raise, FG adds N4.5tn agric, infrastructure funds

Some players in the Nigerian economy have shared different views following the decision of the Federal Government to increase the 2025 Appropriation Bill from N49.7tn to N54.2tn on the back of additional revenues generated by key government agencies.

On Wednesday, letters from President Bola Tinubu were read on the floor of the Senate indicating the adjustments in the yet-to-be-passed budget.

The President conveyed the budget adjustment in separate letters sent to both the Senate and the House of Representatives, which were read during Wednesday’s plenary by the Senate President, Godswill Akpabio.

Tinubu presented a N49.7tn budget proposal, themed ‘Budget of Restoration: Securing Peace, Rebuilding Prosperity,’ to the National Assembly in November.

The Federal Government projects a total revenue of N36.35tn for 2025, anchored on improved non-oil revenue generation. This includes expanded tax collections, customs duties, and independent revenue from government-owned enterprises, alongside oil revenue projections based on a crude oil benchmark of $75 per barrel, a production target of 2.06 million barrels per day, and an exchange rate of N1,500 per USD.

The total expenditure of N49.7tn includes significant allocations to critical sectors while targeting a fiscal deficit of N13.39tn (3.96 per cent of GDP). This deficit will be financed through domestic and external borrowings as well as innovative public-private partnership arrangements.

Tinubu said the increase was driven by N1.4tn in additional revenue from the Federal Inland Revenue Service, N1.2tn from the Nigeria Customs Service, and N1.8tn generated by other government agencies. Following the reading of the letter, Akpabio referred the President’s request to the Senate Committee on Appropriations for urgent consideration.

He also assured lawmakers that the budget would be finalised and passed before the end of February.

President Tinubu had in a letter read on the floor of the Senate and House of Representatives same day premised the request to increase the budget proposal to additional revenue generated by key agencies of government.

According to the letter, the Federal Inland Revenue Service generated N1.4tn, the Nigeria Customs Service generated N1.2tn while the sum of N1.8tn was generated by other government-owned agencies.

The Federal Government said the increase would also support its diversification programme by investing more into the solid minerals sector and infrastructure projects.

The Minister of Budget and Economic Planning, Atiku Bagudu, disclosed this to journalists after he saw off President Bola Tinubu to the Nnamdi Azikiwe Airport, Abuja, en route to France.

In a letter dated February 3, 2025, addressed to the Speaker of the House of Representatives, Tajudeen Abbas, Tinubu sought an additional N4.5tn to the 2025 Appropriation Bill being considered by the National Assembly.

Explaining the rationale for the adjustment, Bagudu said it was established that the government-owned enterprises, including the Nigeria Customs Service, could contribute more revenue.

He said, “You will recall, Mr President submitted the N49tn budget to the National Assembly, and legislative work commenced.

“The legislative work continued with interactions between the executive and the National Assembly. The National Assembly and the Economic Management Team continued to interrogate all figures.

“In that process, the Senate Committee on Appropriation, Senate Committee on National Planning, and Senate Committee on Finance established that we can generate more revenue by tasking all the institutions to do more, and the Federal Inland Revenue Service confirmed the ability to do more than was submitted.”

He added, “Equally, it was established that the government-owned enterprises could contribute more revenue, as well as the Customs Service.

“So, additional revenue amounting to over N4.5tn was established, and this was taken to the President.

“And guided that this additional revenue should be used further to strengthen the Bank of Agriculture, Bank of Industry, support the diversification programme by putting more money in the solid minerals sector and infrastructure projects.”

However, economist and sustainability expert Marcel Okeke slammed the government for the impromptu increment.

He worried that the budget that should have been operational from January 1, 2025, is still going through the legislative process with changes from the FG.

He said, “If the government was talking about a supplementary budget anytime within the year, that is a different matter than within one to two months; you rush to bring these adjustments. It is good, but the proper thing would have been to wait and come up with a supplementary budget. Everything would have been in order if the budget itself had been rounded off at the time it was supposed to and had become effective January 1, 2025. Not this situation where they are making additions as afterthoughts. You don’t run a country like that. Let me tell you, the figures that they released in December have gone to all parts of the world.

“The world has started doing all that they want to do about Nigeria, on Nigeria, for Nigeria, and with Nigeria based on those figures. We are talking about institutions; analysts all over the world have been using those figures. You may not understand the enormity of this move. Because of the mood that we are in now, people may be clapping that FG saw more money and brought it, but that is not how to do a budget. Who says they will not come back again before the National Assembly finishes the job? My position is that they should have waited and come up with a supplementary budget.”

Chief Economist and Partner at SPM Professionals, Paul Alaje, also raised concerns about the effect of the increased spending on the inflation target of the federal government, which was 15 per cent.

Alaje said, “I think it is straightforward. Number one, FG is claiming that because some agencies of government are now generating more revenue, therefore, they feel we can spend more. Also, I think the real reason is that there seem to be some projects that had been exempted from the 2025 budget, and the government thought it important to add them back to the budget.

“These are some of the factors for the government adding to the 2025 budget, but with this amount in the economy, you should note that the government’s expectation of 15 per cent inflation may remain a mirage.”

Managing Director of Arthur Steven Asset Management Limited, Tunde Amolegbe, sees this as a welcome development that would enable infrastructural growth.

He said, “I have always been an advocate for an ambitious budget because that’s the only way we can improve our grossly inadequate infrastructure before we can even contemplate gravitating towards a productive economy. On a per capita basis, if you look at our budget, we are way below that of countries with similar demographics in terms of population and age. How then do we hope to lift our people out of poverty when the government itself isn’t spending enough to raise people’s standard of living?”

Sounding a note of caution, Amolegbe, a former president of the Chartered Institute of Stockbrokers, affirmed that it is important “that we keep our eye on ratios such as debt-to-revenue and debt-to-GDP to ensure we do not tip into over-leveraged territory.”

A leading economist, who spoke on condition of anonymity, faulted the budget proposal raise, saying it would worsen the economy.

He said, ‘”Why would government raise the budget when its deficit is running to almost N16tn. The deficit is hitting up the economy. With all these borrowings here and there, government should have simply reduced the deficit. By the way, how are we sure the government will even generate up to the budgeted amount. Over the years, have we been generating enough to meet the revenue target? We don’t have that track record.”

Meanwhile, the House of Representatives has thrown its weight behind President Tinubu’s proposal to the National Assembly to increase the 2025 budget proposal from N49.7tn to N54.2tn, saying the development is driven by additional revenue from key government agencies.

After reading the letter on the floor of the Senate and House of Representatives on Wednesday, Senate President, Godswill Akpabio, and the Deputy Speaker of the House of Representatives, Benjamin Kalu, who presided over plenary sessions at the Red and Green Chambers respectively, referred it to the Committees on Finance and Appropriations for quick consideration.

This is even as the Senate President assured Nigerians that the 2025 budget proposal would be passed before the end of February.

In an interview with The PUNCH, the spokesman of the House of Representatives, Akin Rotimi, stated that the parliament had a way of handling such requests.

“We have legislative processes on this and other such matters. The executive proposal has been referred to the House Committee on Appropriations for further legislative action,” he said.

Also speaking, House Deputy spokesman, Philip Agbese, said, “The House of Representatives welcomes the President’s proposal to revise the 2025 budget, which seeks to increase the allocation to ₦54.2tn This bold move, driven by additional revenue from key government agencies, demonstrates the administration’s commitment to revitalising the economy and improving the lives of Nigerians.”

He noted that the focus on critical sectors particularly agriculture, would play a key role in the nation’s journey to food security.

“As we delve into the details of the proposal, we’re particularly encouraged by the focus on strategic sectors, such as agriculture, which will receive a significant boost through the injection of funds into the Bank of Agriculture. This initiative has the potential to empower our farmers, stimulate rural development, and enhance food security.

“We also noted the proposal’s emphasis on enhancing national security, particularly the construction of barracks for our troops. This investment in our military’s welfare and infrastructure attests to the administration’s dedication to protecting our nation and its citizens.

“As we begin our scrutiny of the proposal, we’ll continue to be guided by our commitment to ensuring that every naira is allocated efficiently, effectively, and in the best interests of Nigerians,” Agbese assured.