2025 FEDERAL BUDGET FRIVOLITIES
The 2025 Budget is here. Nigeria is undergoing very serious economic and fiscal crisis. There is stagflation. Inflation rate is currently at 34.6% while food inflation is at 39.93% due to high prices of staple foods including rice, maize, yam, guinea corn, vegetable oil, etc. Economic growth is tepid at 3.46% while unemployment is at all time high. The exchange rate of the naira to the dollar at the official rate of the Central Bank of Nigeria is over ₦1,500 to $1, while the street value is over ₦1,600 to $1. The monetary policy rate is at all time high of 27.5% while interest rates from financial institutions are in excess of 30%. Over 63% of Nigerians are multi dimensionally poor and majority live below the poverty line while debt service is in excess of 45% of aggregate expenditure. Insecurity is rapidly spreading to different parts of the country, including new terrorists’ groups that were previously not in operation in Nigeria.
In the 2025 executive budget proposals, the aggregate expenditure is ₦49.740 trillion, the expected revenue is ₦36.352tn while the budget deficit is ₦13.387tn. Debt service will gulp ₦16.327tn. With this scenario, the reasonable expectation is that every available resource in the 2025 federal budget proposal should be targeted at concrete deliverables aimed at reducing poverty, creating jobs, improving infrastructure and stimulating economic growth. Indeed, frivolous, inappropriate, unclear and wasteful expenditure should be eliminated from the budget. A large part of the funding for the budget will be borrowed and it will be foolhardy to borrow and waste the borrowed funds. There are so many projects that are vaguely described and without location; a play on words using terms like empowerment and sensitization, etc.
The State House and Presidency vote is suffused with bloated routine maintenance, renovation and repair work, purchase of SUVs and vehicles in the billions of naira. These are not priorities for spending borrowed money. Service Wide Votes continue the tradition of lump sum votes for vaguely described expenditure items, which at the end of the year, cannot guarantee value for money. The vote of the Ministry of Agriculture and Food Security is suffused with projects that have no locations, class of beneficiaries and sometimes no clear deliverables. This has been the norm in agriculture budgeting over the years. The most troubling part of this proposal is that many of the unclear proposals are to be funded from debt. Borrowing and demonstrating a clear intent to mismanage the resources is economic sabotage of the highest order and should be discontinued. These votes need to be totally repackaged and nebulous expenditure proposals made clear and to be of benefit to Nigerians.
The 12 River Basin Development Authorities sit on thousands of acres of public land and over the years, get allocations for tractors, farm equipment, implements, fish and livestock replenishment, seeds and implements, etc. They should be revenue centres that remit billions of Naira to FGN instead of the current approach where they gulp money without any meaningful contribution to the revenue. The land, machinery and other infrastructure could be capitalized for collaboration with the private sector for commercial farming that will generate revenue for government. At a minimum, RBDAs should be compelled to fund their personnel and recurrent expenditure pending when they are fully weaned of public funding.
There are many new and ongoing projects proposed by the National Rural Electrification Agency without geographic location and class of beneficiaries beyond stating the name of the state or the geopolitical zone. It is imperative for NASS to verify that such projects are actually ongoing or the exact locations of the new ones before approval. The locations should be included in the approved budget. The Agency’s budget proposal is a clear example of how not to present a budget proposal. There seems to be a deliberate attempt to propose interventions in a way and manner that cannot be monitored and project locations will only be known to the Agency.
The meagre resources allocated to the Federal Ministry of Works have been so thinly spread across hundreds of projects to the extent that money will be spent without any concrete improvements in the works sector. In the interim, NASS should prune down the number of projects and focus on a few which can be improved from available resources. Otherwise, voting N100m, N200m to major road projects (even when prudently spent) will amount to a waste of resources. Some roads even got as low as N10m. This is a joke taken too far.
So many MDAs have votes in the 2025 Budget that are not in any way related to their mandate. This should be streamlined and budget approvals should be centred on mandated activities. So many MDAs are asking for money to pay for unverified debts, purportedly from contractor arrears. This should stop and arrears which ideally is part of debts should be centrally handled and verified by the Debt Management Office.
https://csj-ng.org/download/229035/?tmstv=1736782857