Nigeria’s 2025 Budget: 66% increase in public spending
Nigeria is planning an ambitious budget for 2025, with an estimated expenditure of N47.9 trillion (US$28.74 billion), marking a significant increase of 66% from the N28.77 trillion allocated in 2024.
A budgetary framework focused on economic development
This announcement, relayed by local media on November 14, 2024, quotes the Minister of Budget and Economic Planning, Atiku Bagudu . This budget is part of the objectives of the Medium-Term Expenditure Framework (MTEF) and the Fiscal Strategy 2025-2027, aimed at supporting economic growth.
The budget is based on key assumptions:
- Oil price set at $75 per barrel.
- Oil production expected at 2.06 million barrels per day.
- Exchange rate of 1400 naira to 1 dollar.
- GDP growth projected at 4.6%.
Debt management and budget deficit
To finance the plan, the government plans to borrow N13.8 trillion to cover a budget deficit of 3.87 percent of GDP . President Bola Tinubu said the debt service to revenue ratio currently stands at 65 percent, down from 97 percent previously.
However, in July 2024, Afreximbank estimated that this ratio could reach 110.4%, revealing concerns about Nigeria’s ability to meet its financial commitments.
Persistent challenges in a fragile economic context
Despite the government’s efforts to strengthen the economy, several obstacles remain:
- Inflation : It rose to 32.7% in October, compared to 32.15% in August 2024. This increase is attributed to the increase in gasoline prices and recent floods.
- Impact of floods : These natural disasters have aggravated economic pressures.
Ongoing economic reforms
The Nigerian government has introduced various reforms aimed at stabilizing the economy. According to the World Bank , although these measures have generated notable progress, structural challenges remain significant.
This budget reflects the authorities’ commitment to stimulating economic growth, but it also underlines the need for rigorous management to ensure the country’s financial viability.
