Nesg warned that 2025 budgets were not enough to meet urgent national needs

The Nigerian Economic Summit group (NESG) has led to concerns that the 2025 budget failed to meet Nigerian social demands and critical infrastructure.

In the latest publication, “2025 Budget Analysis FGN: Can the budget provide a major economic improvement?,” Think Tank Policy highlighting persistent structural problems in the country’s fiscal planning, a warning that without significant changes, the objectives of Nigerian economic development will remain beyond reach.

NESG observes that public investment continues to be treated as a “residual budget item,” only accepting what is left after recurring expenses, including salary, overhead, and debt service, has been completed. This budgeting approach, he said, has repeatedly damaged multi-year infrastructure programs and social development.

Between 2015 and 2024, the average total government expenditure was only 13.1 percent of Nigerian gross domestic product (GDP), a number that was far below the global average of 30 percent, and significantly lower than the sub-Sahara African regional average of 21.2 percent.

In the APROPRISIA Bill, the federal government allocated ₦ 27.96 trillion, around 50.8 percent of the total ₦ 54.99 trillion budget for repeated expenses, which includes debt obligations and non-debt expenses. Meanwhile, capital expenditure, which funding critical infrastructure and social investment, is allocated 49.2 percent.

Nesg warned that the lack of chronic investment in infrastructure and human resource development continues to hamper Nigerian economic diversification efforts.

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“In addition, the current framework of operational public financial management from the Federal Nigerian government is considered less effective in ensuring the government’s annual budget plays the role of economic stabilization and balance,” the report said. He argues that unless there is an improvement in how resources are mobilized and allocated, the size of the budget alone will not be translated into meaningful economic benefits.

Apart from its shortcomings, NESG acknowledged several positive aspects of the 2025 budget, especially the emphasis on the use of public expenditure to stimulate aggregate demand and support output growth. He also noted that, for the first time in recent years, capital expenditure slightly exceeded non-accounts repeated expenses. This is an ambitious fiscal attitude that prioritizes infrastructure, debt service, and allocation that is expanded to legal entities, including the newly established Regional Development Commission.

However, Nesg emphasized that three challenges continued to continue to damage the budget performance: inefficiencies in public expenditure, weak income optimization, and increased debt service burden. These problems, warn, threaten to reduce economic growth from year to year.

Another urgent concern raised in the report is that Nigeria’s low public expenditure per capita compared to the peer economy. With a population of around 230 million, the 2025 budget was translated into an allocation per capita only ₦ 239,087, or around US $ 159.4 per year. This figure is very low from South African public expenditure around US $ 1,957 per capita, and is also far below the average country of US $ 800.

This situation is even more disturbing in important sectors such as health and education. The federal government only allocated ₦ 2.38 trillion (US $ 1.49 billion) for health services and less than ₦ 2.59 trillion (US $ 1.62 billion) for educational services for 2025.

NESG warns that the lack of funds from these vital sectors will damage the long-term consequences for the development of human resources, economic competitiveness, and efforts to reduce poverty.

“These figures indicate that the Nigerian budget provisions are very inadequate to deal with urgent social needs and infrastructure,” the group concluded.

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