As the National Assembly passes the N54.99trn budget of 2025, PAUL OGBUOKIRI reports that Nigerians will contend with more tariffs from the government agencies, who the government is expecting to further squeeze Nigerians for more money to fund the budget. That is even as poverty and hardship continue to increase
NASS approves N54.99trn budget for 2025
The National Assembly has passed Nigeria’s 2025 national budget, amounting to N54.99 trillion.
This represents a 99.96 per cent increase from the 2024 budget of N27.5 trillion, marking the largest annual jump in recent years.
President Bola Tinubu initially proposed a budget of N49.7 trillion but later requested an increase to N54.2 trillion before the National Assembly approved the final figure of N54.99 trillion.
The key breakdown of the 2025 budget is as follows: Total Expenditure: N54.99 trillion; Statutory Transfers: N3.65 trillion; Recurrent (Non-Debt) Expenditure: N13.64 trillion; Capital Expenditure: N23.96 trillion; Debt Servicing: N14.32 trillion; Deficit-to-GDP Ratio: 1.52 per cent.
This came as President Bola Tinubu had on Wednesday last week jerked up the proposed 2025 budget from the N49.7 trillion he earlier presented to the National Assembly to N54.2 trillion.
The President announced an increase in the proposed budget size in separate letters forwarded to the Senate and the House of Representatives.
The letter, read during plenary by Senate President, Godswill Akpabio, said the increase arose from N1.4 trillion additional revenues made by the Federal Inland Revenue Service (FIRS), N1.2 trillion made by the Nigeria Customs Service, and N1.8 trillion generated by some other government owned agencies like the Nigerian Ports Authority(NPA), Nigerian Maritime Administration and Safety Agency(NIMASA) etc.
Akpabio consequently directed the request to the Senate Committee on Appropriation for expeditious consideration, and declared that the 2025 budget would be passed before the end of February.
Corroborating the National Assembly, Minister of Budget and National Planning, Atiku Bagudu, recalled how the President submitted a N49 trillion budget to the National Assembly and legislative work commenced.
He explained that the legislative work continued with interactions between the executive and the National Assembly, as well as the economic management team, which continued to interrogate all the figures.
Bagudu said: “While the process was still going on, 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(FIRS) confirmed the ability to do more than was submitted.
“It was established that the government-owned enterprises can contribute more revenue, as well as the Customs Service.
“So additional revenue amounting to over N4.5 trillion was established and this was taken to the President and he guided that this additional revenue should be used to further strengthen the Bank of Agriculture, Bank of Industry, support the diversification programme by putting more money in the solid minerals sector, as well as infrastructure projects.”
Commenting on the adjustment of the Medium Term Expenditure Framework, (MTEF), Bagudu stated that even when the budget was submitted, the MTEF was amended.
“The MTEF that was initially approved was for a budget of less than N49 trillion. So, it goes together and so the consequential amendment to the MTEF will certainly follow.”
Looming danger
In his reaction to the increase of the 2025 Budget, Analyst and Executive Vice Chairman at Highcap Securities Limited, David Adonri, said: “The financial management practice of the Federal Government does not inspire confidence. This is because of conflicts between fiscal policy and monetary policy. While fiscal policy is expansionary as exemplified by growing fiscal deficit which fuels inflation, monetary policy is contractionary to rein in inflation caused by excessive public spending amidst scarcity of goods.
“The lack of conscious effort by the Federal Government to balance the budget to bring sanity to public finance, promote economic stability and facilitate non-inflationary growth to the economy beats my imagination. NASS’ approval of the N54.99 trillion budget of 2025 budget with the fresh increase of about 10 per cent, when the government is still running an overbloated budget deficit is a big threat to bringing down inflation rate to 15 per cent this year as projected in the Appropriation Act. If the Federal Government is earning higher revenue than projected, why not use the excess to defray the deficit?”
Also speaking, a former Chartered Institute of Stockbrokers (CIS) President, Olatunde Amolegbe, 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.
He added: “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?
“It’s clear the increase in budget will increase the size of the deficit, which stands at about N13 trillion at the moment. I would. However, like to see adjustments that might have been made to the revenue assumption in the new budget to know the quantum of increase. However, the fact that the budget increase is occasioned by increased revenue collection by various government agencies is positive.”
“For me, in as much as the budget is faithfully implemented and monies spent judiciously, we should not have any issues .It’s however 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,” Amolegbe concluded.
Why 2025 budget was increased-Bagudu
As Nigerians continue to offer their opinions on the increased budget passed by the National Assembly, the Minister of Budget and Economic Planning, Senator Atiku Bagudu, has explained that government jerked up the budget to have more revenue to strengthen the Bank of Agriculture, Bank of Industry and support the diversification programme by putting more money in the solid minerals sector as well as infrastructural projects.
According to him, the action evidently widens the gap between the rich and the poor, enriching the affluent while further marginalizing the underprivileged. “Instead of imposing additional burdens on the poor, students, and other vulnerable groups, why not levy contributions from companies that boast of enormous profits year after year.”
It could trigger growth, inflation
Reacting to the passed N54.99 budget, an Abuja-based emerging markets expert, Ike Ibeabuchi, said: “It is an expansionary budget, which can trigger economic growth but also inflation, if not well managed.
“The money for the budget needs to be raised from productive activities, so as to avoid a further rise in inflation.”
The purpose of an expansionary fiscal policy is to stimulate aggregate demand and compensate for shortfalls in private demand.
Tools such as increased government spending—particularly on infrastructure—tax cuts, and transfer payments are often deployed to achieve this.
Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, had also argued two weeks ago that the 2025 budget cannot stoke inflation.
“You only stoke inflation from the fiscal side if you inject new money,” Oyedele explained.
He emphasised that spending on productive activities, funded through taxes, resource revenue, or borrowing (not from the Central Bank), has a muted impact on inflation.
However, Joshua Ajewole, a publisher, said that the Federal Government has prioritized worsening the economic hardship the nation is currently enduring. “In an economy as challenging as this, where internet access is mandatory for students and the working class, the government should shoulder this burden instead of further weighing down the already weary shoulders of the public. If anything, affordability should be prioritized during such tough times”, he said.
Similarly, International trade expert, Mr. Lucky Amiwero, expressed worries that government is hinging the recent increase in the national budget by over 9.1 per cent on revenue increase recorded from Customs and other government agencies in 2024, saying the revenue was collected from Nigerians while the economy is bleeding and poverty rising at an alarming rate.
He emphasized that the development means that Nigerians will witness more tariff hikes this year by agencies to meet government’s demand, wondering how inflation could be tamed by hiking tariffs.
Recall that the Federal Government plans a 65 per cent electricity tariff increase this year, even as the Nigerian telecommunications operators have started implementing the long-awaited 50 per cent tariff hike following regulatory approval from the Nigerian Communications Commission(NCC)
Also, the Nigerian Ports Authority(NPA) has announced a 15 per cent tariff increase, while the Nigeria Customs Service(NCS) plans to add an extra 4 per cent administrative charge on (FOB) value of imports.
The Central Bank of Nigeria (CBN) is set to introduce new charges for ATM transactions, starting March 1, 2025. Off-site ATM: N100 charge, plus a surcharge of not more than N500 per N20, 000 withdrawals.
In all of these, Professor of Economics at Babcock University, Ogun State, Adegbemi Onakoya, said that the government was going back to the people who “already been pummeled by economic hardship to squeeze the last pint of blood from the to fund its budget. The economy is not in the right state for the government to go to the people to fund its budget. What should have been the government’s preoccupation now is how to revive the economy by investing more on the people to improve consumption and enhance productivity,” he stressed.
