Former Vice President Atiku Abubakar says the 2025 budget presented by President Bola Tinubu to the National Assembly lacks the reforms to address Nigeria’s economic challenges.

Atiku, the Peoples Democratic Party (PDP) presidential candidate in the 2023 election, said this in a statement on Sunday, December 22, 2024.

President Tinubu had, on Wednesday, December 18, presented the N49.7 trillion 2025 budget christened ‘restoration budget’ to the National Assembly.

Atiku, however, noted that the underperformance in capital spending, crucial for fostering economic transformation, raised concerns about the execution of the 2025 budget.

He said: “The 2024 budget’s underperformance signals poor budgetary execution. By Q3 of the fiscal year, less than 35% of the allocated capital expenditure for MDAs had been disbursed, despite claims of 85% budget execution.

“Debt servicing, which accounts for N15.8 trillion (33% of the total expenditure), is nearly equal to planned capital expenditure (N16 trillion, or 34%).

“Moreover, debt servicing surpasses spending on key priority sectors such as defence (N4.91 trillion), infrastructure (N4.06 trillion), education (N3.52 trillion), and health (N2.4 trillion). This imbalance will likely crowd out essential investments and perpetuate a cycle of increasing borrowing and debt accumulation, undermining fiscal stability.

Security, education top as Tinubu presents N49.7tn 2025 ‘restoration budget’

“The government’s recurrent expenditure remains disproportionately high, with over N14 trillion (30% of the budget) allocated to operating an oversized bureaucracy and supporting inefficient public enterprises. The lack of concrete steps to curb wastage and enhance the efficiency of public spending exacerbates the fiscal challenges, leaving limited resources for development.

“After accounting for debt servicing and recurrent expenditure, the remaining allocation for capital spending, ranging from 25% to 34% of the total budget, is insufficient to address Nigeria’s infrastructure deficit and stimulate growth. This equates to an average capital allocation of approximately N80,000 (US$45) per capita, insufficient to meet the demands of a nation grappling with slow growth and infrastructural underdevelopment.”

The former Vice President added that Tinubu’s administration’s decision to increase the Value Added Tax (VAT) rate from 7.5% to 10% is a retrogressive measure that will exacerbate the cost-of-living crisis and impede economic growth.

Atiku stated: “By imposing additional tax burdens on an already struggling populace while failing to address governance inefficiencies, the government risks stifling domestic consumption and further deepening economic hardship.

“The 2025 budget lacks the structural reforms and fiscal discipline required to address Nigeria’s multifaceted economic challenges.

“To enhance the budget’s credibility, the administration must prioritise the reduction of inefficiencies in government operations, tackle contract inflation, and focus on long-term fiscal sustainability rather than perpetuating unsustainable borrowing and recurrent spending patterns. A shift towards a more disciplined and growth-oriented fiscal policy is essential for the nation’s economic recovery.”

The Star