“Tinubu’s N54.9 Trillion Budget: Will it Drive Economic Growth or Fuel Inflation?”

In December 2024, President Bola Tinubu presented a budget proposal of N49.7 trillion to the National Assembly, but by February 5, 2025, he notified lawmakers of an additional N4.5 trillion, raising the total to N54.9 trillion. This revised budget comprises significant allocations: N3.6 trillion for statutory transfers, N14.3 trillion for debt servicing, N13.1 trillion for recurrent non-debt expenditures, and N24 trillion for capital expenditure.

The National Assembly had initially set January 30, 2025, as the target date for budget approval. However, due to delays in the budget defense sessions, the plenary resumed on February 4, 2025. The Chairman of the House Committee on Appropriations, Abubakar Bichi, explained that the process involves extensive budget defense, harmonization, and final report submission before approval.

After the Christmas break, President Tinubu sent separate letters to both chambers of the National Assembly, proposing an increase in the budget. He justified the adjustment by citing additional revenues generated by key government agencies, including N1.4 trillion from the Federal Inland Revenue Service, N1.2 trillion from the Nigeria Customs Service, and N1.8 trillion from other agencies. The Senate President, Godswill Akpabio, read the letter during plenary, and the proposal was quickly referred to the Senate Committee on Finance and Appropriations for urgent review. Akpabio assured that deliberations would conclude by the end of February.

In a rapid response, the Senate passed the 2025 budget on February 13, 2025, totaling N54.9 trillion. Akpabio praised the contributions of the Finance Committee and all members involved in the process, expressing hope that the budget would help drive Nigeria’s progress.

Despite the swift passage, economic experts, manufacturers, and analysts have raised concerns, with some viewing the budget adjustment as a mere academic exercise. They questioned why the additional revenue was included in the 2025 budget instead of being used to ensure the full implementation of the 2024 budget. Some warned that the increased budget could lead to inflation if not managed properly.

David Etim, President of the Calabar Chamber of Commerce and Industry (CALCCIMA), highlighted that while budgets are projections, their success hinges on the government’s ability to generate revenue. He suggested that if the N5 trillion increase were invested in infrastructure development, it could significantly boost the economy, reduce inflation, and create jobs. However, if allocated to recurrent expenditures, it might exacerbate inflationary pressures.

Daniel Dickson-Okezie, an expert in small and medium enterprises, stressed the importance of strategic allocation of the additional funds. He emphasized that the government must prioritize long-term investments, particularly in infrastructure, to foster economic growth and improve the standard of living for Nigerians. He argued that the balance between capital and recurrent expenditures must be adjusted to drive sustainable development.

Yusuf Mohammed, a former House of Representatives member, expressed skepticism about the entire budget process. He argued that the additional revenue should have been used to fully implement the 2024 budget instead of being added to the 2025 budget. Mohammed contended that by focusing on completing ongoing infrastructural projects, the government could stimulate economic activity, reduce unemployment, and avoid unnecessary inflationary pressures.

As the government faces mounting scrutiny, stakeholders continue to emphasize the need for infrastructure-focused spending. The success of the N5 trillion budget increase will depend on how well the funds are utilized and whether the government can address key issues such as inflation, economic growth, and the implementation of crucial projects.

Expectations are high as Nigerians look to see whether this substantial budget hike will serve as a catalyst for growth or contribute to further economic challenges. The coming months will determine the true impact of President Tinubu’s ambitious budget proposal.