Nigeria: Targeting Inflation At 15%, Tinubu Presents N49.7trn 2025 Budget Proposal

Targeting inflation at 15 percent, President Bola Ahmed Tinubu yesterday presented a N49.7 trillion budget proposal for the 2025 fiscal year before a joint session of the National Assembly in Abuja, with the defence and security sectors getting the highest allocation of N4.91trillion.

The President projects inflation which has been soaring to drop from 34.6percent to 15 percent in the 2025 proposal.

In the proposed fiscal plan, the Defence and Security were closely followed by infrastructure with the sum of N4.06 trillion, while the sum of N2.48 trillion was allocated for the health sector and N3.52 trillion budgeted for the education sector.

Tinubu, in the budget presentation held at the House of Representatives Chamber, noted that the budget christened, “Budget of Restoration: Securing Peace, Rebuilding Prosperity,” strikes at the very core of his Renewed Hope Agenda and demonstrated his government’s commitment to stabilising the economy, improving lives, and repositioning the country for greater performance.

The President added that the 2025 budget proposal again reinforces its administration’s roadmap to secure peace, prosperity, and hope for a greater future for our beloved nation.

He explained that the journey of economic renewal and institutional development, which commenced 18 months ago as a nation, was very much underway.

Tinubu noted that while it wasn’t a journey the country chose, his government had to embark on it for Nigeria to have a real chance at greatness.

He said: “The road of reforms is now clearly upon us, and as the President of this blessed nation, I know this less-travelled road has not been easy.

“That there have been difficulties and sacrifices. They will not be in vain. And we must keep faith with the process to arrive at our collectively desired destination.

“We must build on the progress we have made in the past eighteen months in restructuring our economy and ensuring it is strong enough to withstand the headwinds of any future shocks of the global downturn.”

The President assured that the 2025 budget was one of restoration, saying it sought to consolidate the key policies his government has instituted to restructure the economy, boost human capital development, increase the volume of trade and investments, bolster oil and gas production, get manufacturing sector humming again and ultimately increase the competitiveness of our economy.

Tinubu stressed that his government does not intend to depart from this critical path to strengthen the Nigerian economy, saying just as he believes in the resilience of the economy to withstand the current challenges.

He emphasised that the objective of his government was to further stimulate the economy through the implementation of targeted fiscal stimulus packages through public expenditures and specific non-inflationary spending.

The President said the reforms his government instituted were beginning to yield results, adding that Nigerians would soon experience a better and more functional economy.

He noted: “Global economic growth for the outgoing year 2024 was projected at 3.2 percent, and against predictions, our country made significant progress.

“Our economy grew by 3.46 percent in the third quarter of 2024, up from 2.54 percent in the third quarter of 2023. Our Foreign Reserves now stand at nearly 42 billion US dollars, providing a robust buffer against external shocks.

“Our rising exports are reflected in the current trade surplus, which now stands at 5.8 trillion naira, according to the National Bureau of Statistics.”

These, Tinubu pointed out, were clear results of gradual recovery, among others, reflect the resilience of our economy and the impact of deliberate policy choices we made from the outset.

On 2024 budget performance, the President informed the National Assembly that his administration attained remarkable milestones, noting that they achieved N14.55 trillion in revenue, meeting 75 percent of the target as of the third quarter.

He said his government achieved N21.60 trillion in expenditure, representing 85 percent of its target in the third quarter.

Tinubu stressed that while challenges persist, they have improved revenue collection and fulfilled key obligations, saying the transformational effects of this on our economy are gradually being felt.

He explained that the budgetary allocations in the 2025 budget reflects the administration’s strategic priorities, especially in the implementation of the Renewed Hope Agenda and its developmental objectives.

The President further said in 2025, his government was targeting N34.82 trillion in revenue to fund the budget, while government expenditure in the same year is projected to be N47.90 trillion, including N15.81 trillion for debt servicing.

He added that a total of N13.08 trillion, or 3.89 percent of GDP would make up the budget deficit.

Tinubu noted that the proposed budget projects inflation would decline from the current rate of 34.6 percent to 15 percent next year, while the exchange rate would improve from approximately N1,700 per US dollar to N1,500, and a base crude oil production assumption of 2.06 million barrels per day (mbpd).

He stated: “Our budgetary allocations underscore this administration’s strategic priorities, particularly in advancing the Renewed Hope Agenda and achieving its developmental objectives.

“Highlights of the 2025 Budget Allocations: Defence and Security: N4.91 trillion; Infrastructure: N4.06 trillion; Health: N2.48 trillion; Education: N3.52 trillion

“Security is the foundation of all progress. We have significantly increased funding for the military, paramilitary, and police forces to secure the nation, protect our borders, and consolidate government control over every inch of our national territory.

“The government will continue to provide our security forces with the modern tools and technology they need to keep us safe. Boosting the morale of our men and women in the armed forces will remain our government’s top priority.

“When we launched the Renewed Hope Infrastructure Development Fund, it was with the conviction that infrastructure remains the backbone of every thriving economy. Under this programme, we are accelerating investments in energy, transport, and public works.

“By leveraging private capital, we hope to complete key projects that drive growth and create jobs. We have already embarked on key legacy projects: Lagos-CalabarCoastal Highway and Sokoto-Badagry Highway, which will have a huge impact on the lives of our people and accelerate economic output.”

The President further said his administration has so far disbursed N34 billion to over 300,000 students via the Nigeria Education Loan Fund (NELFUND).

He added: “In the 2025 budget, we have made provision for N826.90 billion for infrastructure development in the educational sector.

“This provision also includes those for the Universal Basic Education (UBEC) and the nine new higher educational institutions.

“We are convinced that Universal Health Coverage initiatives will strengthen primary healthcare systems across Nigeria. In this way, we have allocated N402 billion for infrastructure investments in the health sector in the 2025 Budget and another N282.65 billion for the Basic Health Care Fund.

“Our hospitals will be revitalised with medication and better resources, ensuring quality care for all Nigerians. This is consistent with the federal government’s planned procurement of essential drugs for distribution to public healthcare facilities nationwide, improving healthcare access and reducing medical import dependency.”

The President said the government would be supporting farmers with funding and inputs to reignite productivity, saying food security is non-negotiable.

He said: “Our nation faces existential threats from corruption and insecurity and suffers from many past poor choices. These challenges are surmountable when we work collaboratively to overcome them. We must rewrite the narrative of this nation together, with every leader, institution, and citizen playing their part.”

Welcoming the President earlier to the 2025 budget presentation, President of the Senate, Senator Godswill Akpabio, explained that the impressive performance of the 2024 national budget encouraged members of the National Assembly to increase the lifespan of the 2024 budget beyond December 31 this year.

He said, “We have noted the 2024 budget performances of 50 percent for capital expenditure and 48 percent for recurrent expenditure respectively.

“Given these great achievements, we have deemed it necessary to extend the life of the 2024 budget to June 30, 2025.

“The enabling law for this extension has already being put in place by this patriotic Assembly, as a testament to our appreciation for the great performance of the budget, ensuring we build upon your momentum.

“We commend your steadfast commitment to collaborate, cooperate, and work with the National Assembly to achieve your grand vision for Nigeria.”

Akpabio advised heads of the various ministries, departments and agencies of the federal government to make themselves available for the budget defence.

According to him, “Let me take this opportunity to stress the importance of the Ministers and Heads of Extra-ministerial Departments being prepared to respond promptly to requests for them to come and defend their sectoral allocation in the exercise of our legislative oversight.

“We have observed concerning behaviour from some ministers and heads of extra-ministerial departments, who sometimes neglect their duty to promptly submit to legislative oversight, sometimes even disregarding invitations from relevant Committees of the legislature.

“It is imperative they understand that we will not condone such breaches of the Constitution going forward.”

Akpabio noted that under the Tinubu’s administration, Nigerians had, “witnessed remarkable strides in economic reforms, aimed at enhancing our nation’s stability and growth.”

He said, “The courageous decision to remove fuel subsidies, though challenging, showcases your (Tinubu’s) unwavering commitment to redirecting resources to critical sectors such as education and healthcare.

“Your collaboration with the central bank has cultivated an environment ripe for investment, and your focus on infrastructure development reflects a visionary commitment to improving the connectivity that fuels our economy.

“Furthermore, your initiatives to strengthen our security framework stand as a testament to your resolve in tackling the pressing challenges of our time.”

The Chairman of the National Assembly also commended Tinubu’s efforts in the era of security.

His words, “We commend your tireless efforts, along with those of our brave men and women in uniform, for liberating our lands from the grip of terror.

“Today, no community is under the threat of terrorism, a monumental achievement we celebrate together.

“The reduction in kidnapping incidents and the neutralisation of over 11,000 terrorists and insurgents is a testament to patriotism, strength and determination.”

The Senate President said Tinubu’s dedication to fostering international relations paves the way for fruitful partnerships that will propel the nation forward.

He said, “We are witnessing a resurgence in foreign direct investment, made possible by your visionary directives that ease the visa processes for Nigerians traveling to other countries, and at the same time welcome investors and tourists alike to our country.

“Your innovative approaches in our embassies and the Ministry of Foreign Affairs have opened new doors for Nigeria and its people. For this we thank you.”

Akpabio stated that the introduction of social welfare programmes embodies the President’s unwavering belief in uplifting the living standards of our citizens.

“You remind us that our nation is not merely constructed of bricks and mortar, but of the resilience and determination of its people.

“Nigerians are taking notice of your remarkable achievements: you have doubled aggregate government revenues to over NGN 18.32 trillion, reduced debt service expenditures from 97 percent to 68 percent, fulfilled $7.5 billion in foreign exchange obligations, increased oil production to 1.8 million barrels per day, and launched the Compressed Natural Gas initiative.

“Your administration has processed over N45.6 billion for student payments, signed the National Minimum Wage Law, and raised the national minimum wage to N70,000 a month, all while providing over N570 billion in financial support to the 36 states.”

He commended the groundbreaking tax reform initiative including the four tax reform bills, namely the Joint Revenue Board of Nigeria (Establishment) Bill, 2024; Nigeria Revenue Service (Establishment) Bill, 2024; Nigeria Tax Administration Bill, 2024; and the Nigeria Tax Bill, 2024.

Commenting on the tax reform, the Senate President said: “It is disheartening that those who have not taken the time to understand these bills are the loudest critics.

“I urge all Nigerians, especially those in public office, to engage with these vital reforms thoughtfully.

“This initiative marks the first comprehensive tax reform since Nigeria’s independence, presenting a transformative opportunity for rejuvenating small and medium enterprises and enhancing the livelihoods of ordinary Nigerians.

“These reforms will not only improve Nigeria’s revenue profile but also create a more conducive and internationally competitive business environment, transforming our tax system to support sustainable development.”

Akpabio said the infrastructure renaissance has paved the way for many roads, including the Coastal Road and crucial arteries in the Abuja Capital City and other parts of the country.

“These developments are not merely about concrete and asphalt; they represent the lifeblood of our economy, connecting our people and fostering growth.”

He urged Nigerians to bear with the President whose economic reforms had imposed hardship on Nigerians but noted, that, “we are light-years away from where we began, though some rivers remain to be crossed.”

He said, “The pains we feel are not merely the pains of hardship; they are the pains of childbirth. When that season arrives in Nigeria, when this administration births that season, we will rejoice for the struggles endured.

“For now, I ask for your patience and urge all Nigerians to cooperate with the President and maintain faith in his vision.

“Mr. President, while you cannot be everywhere, you have eyes everywhere. We, the Distinguished Senators and Honourable Members of the House of Representatives, are your eyes in our constituencies and every corner of Nigeria.

“When our constituents struggle to afford rice, they come to us. When their shoes pinch, they seek our assistance. When the economic alarm sounds, they turn to us.

“Therefore, we are committed to ensuring that you touch the hearts and pulse of Nigerians through these appropriation bills resonating with the sounds of hope and signaling the dawn of Nigeria’s economic rebirth’, he added.

Giving the vote of thanks, Speaker of the House of Representatives, Hon. TajudeenAbbas described the proposed 2025 budget as ambitious and commendable.

He noted that “Nigeria’s fiscal realities warrant critical reflection. Despite being Africa’s most populous nation with over 220 million people, our 2024 national budget of $36.7 billion remains modest compared to countries like South Africa, with a budget of $160 billion for its 60 million citizens; Egypt, with $110 billion for 110 million people; Algeria, with $60 billion for 45 million people; and Morocco, allocating $50 billion for its 37 million residents.

“Indeed, Nigeria’s low tax revenue also remains a major constraint. Our tax-to-GDP ratio, currently at approximately 10.9 percent for 2024, is among the lowest in Africa, significantly below the continental average of 15.6 percent.

“In comparison, South Africa’s tax-to-GDP ratio stands at 25.4 percent, while Rwanda and Ghana, with much smaller populations, report ratios of 15.1 percent and 14.1 percent, respectively”.

He further stated that “Even our VAT collection efficiency at approximately 20 percent is notably below the near 70 percent efficiency achieved by South Africa, Equatorial Guinea, and Zambia.

“Addressing these challenges requires urgent and comprehensive tax reforms to broaden our tax base, improve compliance, streamline administration and reduce reliance on borrowing. The National Assembly will continue to work with your administration to ensure that such reforms are equitable, effective, and considerate of the needs of vulnerable populations.

“To this end, we have engaged stakeholders to address concerns raised on the tax reform bills, fostering trust and cooperation. I have personally led numerous high-level meetings and consultations with state governors and other key stakeholders on this issue, achieving positive outcomes.

“History teaches us that transformative progress often begins with difficult decisions. Examples from China’s market reforms, India’s liberalisation, and South Korea’s industrialisation affirm the enduring benefits of such bold action. These lessons inspire confidence that Nigeria’s ongoing reforms will foster economic growth, reduce poverty, and ensure long-term prosperity.”

He further stressed that, “Stabilising prices, boosting agricultural productivity, expanding infrastructure, and investing in education, healthcare, and security remain paramount priorities. To strengthen national unity and build trust, it is essential for the government to communicate its achievements effectively to the Nigerian people.

“Let me assure you that the National Assembly is fully committed to supporting the successful implementation of the 2025 budget. This is not merely your budget; it is a national project requiring collaboration across all arms of government.

Sign up for free AllAfrica Newsletters

Get the latest in African news delivered straight to your inbox

Success!

Almost finished…

We need to confirm your email address.

To complete the process, please follow the instructions in the email we just sent you.

Error!

There was a problem processing your submission. Please try again later.

“We will work to ensure its timely passage, provide legislative support for critical reforms, and conduct robust oversight to guarantee transparency and efficiency in its execution”.

Speaking with newsmen after the budget presentation, Chairman of the Senate Committee on Capital Markets and Institutions, Osita Izunaso (APC, Imo West), said the late submission of the 2025 budget proposals would not make the January to December national Budget cycle, possible this year.

Isunazo said, “The budget is coming late. Today is December 18, so we will lose that culture of beginning a new year with a new budget. Nevertheless, the budget has a lifespan of 12 months. So whenever we pass it, it will have a lifespan of 12 months. Even after 12 months, we still have the liberty to extend it. In fact, we are extending the 2024 budget today.

“But that culture of starting on the 1st of January, we have lost it. The executive ought to have brought this budget way before now. But I believe that maybe they are putting things together. They wouldn’t want to delay deliberately bringing the budget to the National Assembly. So I’m saying that that is not a problem, but we have lost that culture.”

Meanwhile, in the Appropriation Bill, an estimated N27.8 trillion would be devoted to four key priorities in the proposed 2025 federal budget, including infrastructure, national security, human capital development, as well as agriculture and food security.

Director General, Budget Office of the Federation (BoF), Dr. Tanimu Yakubu, gave the hint yesterday in a speech he delivered after President Tinubu presented the N49.7 trillion 2025 Appropriation Bill to the National Assembly.

While an estimated N16 trillion was earmarked for capital expenditure, N6 trillion was proposed for human capital development, N5 trillion for national security and N826 billion for agriculture and food security.

Listing the key budgetary priorities, including security, human capital development, security, agriculture and food security, he said: “Recognising that peace is the bedrock of progress, the federal government has allocated N5 trillion to security. These funds will strengthen the capabilities of the armed forces, police, and intelligence agencies to combat insurgency, banditry, and other forms of insecurity.

“The goal is to restore law and order and create an environment conducive to economic growth.”

On infrastructure development, he stated that a significant portion of the capital expenditure–estimated at N16 trillion–will focus on infrastructure, adding that this includes the completion of critical road projects, expansion of rail networks, enhancement of power infrastructure, and investments in housing.

“These initiatives aim to reduce transaction costs, stimulate investment, and create jobs,” he explained.

Tanimu also stated that the on human capital development, the government was prioritising education and healthcare to build a productive and resilient workforce.

“The budget earmarks over N6 trillion for social services, targeting improved access to quality education, modernized healthcare infrastructure, and expanded social safety nets,” he said, even as stressed that to ensure food sufficiency and reduce reliance on imports, N826.5 billion has been allocated to agricultural mechanisation, irrigation projects, and value-chain development.

This, Yakubu noted, would not only boost food production but also support economic diversification and rural development.

Providing further highlights on what he described as reforms for fiscal sustainability, the DG, Budget Office noted that the 2025 budget builds on critical reforms initiated by Tinubu’s administration, including tax reform, adding that the government is expanding the tax base, improving compliance through technology, and aligning taxation with equity and efficiency principles.

He also alluded to fuel subsidy removal, staying that savings from the policy were being redirected to targeted social programmes, such as conditional cash transfers and public transportation initiatives, to protect vulnerable Nigerians.

On debt management, he observed that while borrowing remains a key tool to bridge the fiscal deficit, the government was committed to ensuring that debt servicing does not crowd out investments in critical sectors.

However, he pointed out that “the success of this ambitious proposal depends on disciplined implementation, transparency, and collaboration with all stakeholders.”

ADVERTISEMENT