S ome stakeholders in Nigeria’s economy have expressed mixed reactions to the Federal Government’s decision to increase the 2025 Appropriation Bill from ₦49.7 trillion to ₦54.2 trillion. The adjustment follows additional revenues generated by key government agencies.
On Wednesday, President Bola Tinubu’s letters announcing the budget revisions were read on the Senate floor. The letters, addressed separately to both the Senate and the House of Representatives, outlined the rationale behind the budget expansion.
Originally presented in November, Tinubu’s ₦49.7 trillion budget proposal, titled ‘Budget of Restoration: Securing Peace, Rebuilding Prosperity,’ was set to prioritize economic growth and security. However, with fresh revenue streams identified, the government opted to scale up its fiscal plans.
Projected Revenues and Expenditures The Federal Government anticipates ₦36.35 trillion in revenue for 2025, with a focus on strengthening non-oil income sources. The projections include expanded tax collections, customs duties, and independent revenues from government-owned enterprises, alongside oil revenue based on a crude oil benchmark of $75 per barrel, a daily production target of 2.06 million barrels, and an exchange rate of ₦1,500 per USD.
Total expenditure for the year is now estimated at ₦54.2 trillion, covering critical sectors while maintaining a fiscal deficit of ₦13.39 trillion (3.96% of GDP). This deficit is expected to be financed through domestic and external borrowings and public-private partnerships.
Tinubu attributed the budget increase to additional revenues: ₦1.4 trillion from the Federal Inland Revenue Service, ₦1.2 trillion from the Nigeria Customs Service, and ₦1.8 trillion from other government agencies. The request for the revised budget was referred to the Senate Committee on Appropriations for urgent consideration. Senate President Godswill Akpabio assured lawmakers that the budget would be finalized before the end of February.
Government’s Justification for the Increase Minister of Budget and Economic Planning, Atiku Bagudu, explained that the decision to expand the budget was based on a thorough review of revenue-generating agencies. He highlighted that the Nigeria Customs Service and other government-owned enterprises demonstrated the capacity to contribute more revenue.
Bagudu stated, “During discussions with the National Assembly, it became clear that additional revenues could be mobilized. The Federal Inland Revenue Service and the Customs Service confirmed their ability to surpass previous estimates, leading to an increase in the budget proposal.”
According to him, the additional funds will be channeled toward strengthening the Bank of Agriculture and Bank of Industry, supporting diversification through the solid minerals sector, and financing key infrastructure projects.
Economic Concerns and Diverging Opinions Not all experts are convinced of the government’s approach. Economist and sustainability expert Marcel Okeke criticized the sudden adjustment, arguing that such changes should be incorporated through a supplementary budget later in the year rather than modifying an already submitted proposal.
“The government should have finalized the budget at the start of the year rather than making late-stage additions. Analysts and institutions worldwide have already made projections based on the previous figures,” Okeke said. “This last-minute expansion raises concerns about fiscal discipline.”
Chief Economist at SPM Professionals, Paul Alaje, also raised concerns about the impact of increased spending on inflation, which the government hopes to keep at 15% in 2025.
“With this much money being injected into the economy, the target of 15% inflation may be unrealistic,” Alaje warned. “This increase suggests that some projects were omitted from the initial proposal and are now being reinstated.”
On the other hand, Tunde Amolegbe, Managing Director of Arthur Steven Asset Management Limited, welcomed the development, emphasizing the need for bold fiscal measures to drive infrastructure growth.
“I have always supported ambitious budgets. Without substantial spending, we cannot address our infrastructure deficits and transition to a productive economy,” Amolegbe stated. However, he cautioned that debt-to-revenue and debt-to-GDP ratios should be monitored to avoid excessive borrowing.
A leading economist, speaking anonymously, questioned whether the government could realistically generate the projected revenues. “With a deficit nearing ₦16 trillion, increasing the budget only worsens the economic strain. The government has historically struggled to meet revenue targets,” he said.
Legislative Backing and Next Steps Despite the concerns, the House of Representatives has expressed support for the proposed budget increase. Deputy Speaker Benjamin Kalu, who presided over the plenary session, emphasized that the additional funds would bolster key sectors such as agriculture and national security.
House Deputy Spokesman Philip Agbese noted, “This adjustment reflects the administration’s commitment to revitalizing the economy. We are particularly encouraged by the focus on agriculture, which will receive a significant boost through investments in the Bank of Agriculture.”
Agbese also highlighted the government’s focus on security, including plans to construct military barracks. “These investments in military infrastructure underscore the administration’s dedication to safeguarding citizens and national interests,” he added.
As legislative review continues, the National Assembly has referred the revised budget to the Committees on Finance and Appropriations for swift action. With assurances from Senate President Akpabio, Nigerians can expect the final budget to be passed before the end of February.
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