President Bola Ahmed Tinubu is set to present the 2025 budget proposal of N47.9 trillion to a joint session of the National Assembly tomorrow. This comes as economic experts raise concerns over the reduced dollar value of Nigeria’s allocations, which could affect key economic sectors and infrastructure development.
Compared to the $36.7 billion budget in 2024, the N47.9 trillion 2025 budget translates to just $28 billion at the current exchange rate of N1,652.25 per dollar marking the lowest dollar-equivalent budget since 2018.
Following its approval by the Federal Executive Council (FEC), Minister of Budget and Economic Planning, Atiku Bagudu, explained that the proposal is structured around macroeconomic stability, infrastructure development, and human capital advancement. The budget framework assumes an oil price benchmark of $75 per barrel, daily oil production of 2.06 million barrels, and an exchange rate of N1,400 to the dollar.
Bagudu emphasized the administration’s achievements in economic diversification, security, and infrastructure development in 2024, while noting the 2025 focus areas such as consumer credit, gas initiatives, housing programs, and the National Agricultural Development Fund.
The budget projects a revenue of N34.8 trillion, leaving a deficit of N13.13 trillion—3.89 percent of GDP. Bagudu highlighted the reduction in fiscal deficit from 6.1 percent inherited in 2023 to current levels, attributing it to “successes achieved in 2024.”
However, economic experts, including policy analyst Dr. Justine Amase, caution that the lower dollar value of the budget could undermine economic growth, reduce public capital investment, and affect social intervention programs. Nigeria’s reliance on external debt financing and petrodollars further compounds the risks.
Dr. Amase stressed that for an economy dependent on external trade and financing, reduced public investment in capital accumulation could have significant implications for GDP growth. Between January and October 2023, Nigeria used 50 percent of its total external inflows $3.07 billion of $6.11 billion to service external debt.
With Nigeria’s external debt reaching $41.59 billion as of Q3 2023, concerns persist that the 2025 budget may exacerbate fiscal pressures and hinder infrastructure financing, even as net trade inflows remain low.
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