Atiku Identifies 5 Reasons Tinubu’s 2025 Budget Can’t Solve Nigeria’s Economic Challenges

Former Vice President Atiku Abubakar has criticised the proposed 2025 budget submitted by President Bola Ahmed Tinubu, describing it as inadequate for addressing Nigeria’s deep-seated economic challenges.

Atiku’s remarks, contained in a statement on Sunday, highlighted what he termed “weak budgetary foundations” and unsustainable fiscal practices.

Key Points of Criticism

1. Persistent Budget Deficits and Borrowing:
   Atiku noted that the ₦48 trillion budget, with a projected revenue of ₦35 trillion and a deficit of over ₦13 trillion (4% of GDP), continues a pattern of deficits and over-reliance on borrowing. He pointed out that ₦9 trillion is planned for direct borrowings, alongside ₦4 trillion for project-specific loans, exacerbating Nigeria’s debt burden.
2. Weak Execution of Capital Expenditure:
   He expressed concerns over the poor implementation of the current year’s budget, with only 35% of allocated capital expenditure disbursed by Q3, despite claims of 85% execution. Atiku questioned the government’s ability to execute the 2025 budget effectively.
3. Disproportionate Debt Servicing:
   The ₦15.8 trillion earmarked for debt servicing (33% of total expenditure) nearly equals the ₦16 trillion planned for capital expenditure (34%) and surpasses allocations to critical sectors like:
   1. Defence: ₦4.91 trillionInfrastructure: ₦4.06 trillionEducation: ₦3.52 trillion
   1. Health: ₦2.4 trillion
      Atiku warned that this imbalance could stifle economic growth and perpetuate a cycle of borrowing.
4. High Recurrent Expenditure:
   With over ₦14 trillion (30% of the budget) allocated to running government operations, Atiku criticised the administration for failing to curb waste and reduce the size of the bureaucracy.
5. Inadequate Capital Investment:
   The allocation for capital spending, equating to an average of ₦80,000 (US$45) per capita, was deemed insufficient to address Nigeria’s infrastructural deficit and promote growth.
6. Regressive Taxation:
   Atiku condemned the proposed increase in VAT from 7.5% to 10%, calling it a retrogressive move that would worsen the cost-of-living crisis and strain an already struggling populace.

Recommendations for Improvement

Atiku urged the Tinubu administration to adopt structural reforms and fiscal discipline to improve the 2025 budget’s effectiveness. His recommendations included:

• Reducing inefficiencies in government operations.
• Curbing waste and tackling contract inflation.
• Prioritising long-term fiscal sustainability over borrowing.
• Shifting towards a growth-orientated fiscal policy.

Conclusion

Atiku concluded that the 2025 budget, as it stands, lacks the transformative potential to address Nigeria’s economic challenges. He emphasised the need for disciplined governance and a pivot away from unsustainable borrowing and excessive recurrent spending to achieve meaningful economic recovery.