Nigeria’s National Assembly on Thursday passed the N54.99trn 2025 Appropriation Bill into law.
The development represents the commencement of 2025’s fiscal planning, economic strategies and priorities set for Nigerians.
The budget passed by the National Assembly, which stood at N54.9 trillion naira, marked an increase from the initially proposed amount by President Bola Tinubu, which was N54.2 trillion.
Below are some of the key takeaways from the 2025 budget;
Key Economic Indicators:
Oil Price Benchmark: Set at $75 per barrel, which is somewhat optimistic given the fluctuating global oil prices.
Oil Production: Projected at 2.06 million barrels per day (mbpd), aiming to increase revenue from oil, which remains a critical component of Nigeria’s income.
Exchange Rate: Expected to stabilize at around 1,500 naira to the US dollar, down from 1,700, indicating expectations of currency strengthening or at least stabilization.
Sectoral Allocations:
Defence and Security Allocation: N4.91 trillion was allocated to defence and security, underlining the government’s commitment to tackling insecurity, which has been a persistent challenge. This includes funds for military, paramilitary, and police forces to enhance national security, border protection, and territorial integrity.
Infrastructure Allocation: N4.06 trillion. This sector sees significant investment aimed at improving the country’s physical infrastructure, which is crucial for economic growth. Projects include roads, power infrastructure, and other public utilities, which are expected to provide long-term benefits by enhancing connectivity and efficiency.
Health Allocation: N2.48 trillion. The health sector’s allocation focuses on infrastructure development, with N402 billion specifically for health infrastructure and N282.65 billion for the Basic Health Care Fund.
Education Allocation: N3.52 trillion. With an emphasis on infrastructure, the budget includes N826.90 billion for educational facilities, covering both basic education under UBEC and higher education institutions. This allocation supports the Nigeria Education Loan Fund (NELFUND).
Debt Servicing Allocation: A significant portion, N14.3 trillion, is designated for debt servicing.
Deficit and Revenue Projections:
The budget anticipates a deficit of 3.89% of GDP, which will be financed through borrowing, both domestic and international. Revenue targets are set at N34.82 trillion, reflecting expectations of improved revenue collection strategies, possibly from tax reforms and better oil revenue management.
Inflation Control: The budget projects a significant reduction in inflation from 34.6% to 15%, suggesting measures like improved food security through agricultural investments and better monetary policy coordination.
Poverty Reduction: With strategic allocations towards health and education, there’s an implicit focus on reducing poverty by enhancing human capital, which should lead to better employment opportunities and economic participation.
Economic Growth: The infrastructure and security allocations are designed to stimulate economic growth by fostering a safer environment for business and improving transport and logistics, which are vital for trade and commerce.
