Oluwatosin Enesi
In a reaction posted on his verified X handle on Sunday, Atiku said the budget proposal as presented to the National Assembly by President Bola Tinubu reflected a continuation of business-as-usual fiscal practices.
Atiku said, “This represents a persistent trend under the APC-led administration since 2016, wherein budget deficits have been consistently presented, accompanied by an increasing reliance on external borrowing.
“To bridge this fiscal gap, the administration plans to secure over N13tr in new borrowings, including N9tr in direct borrowings and N4tr in project-specific loans. This borrowing strategy mirrors the approach of previous administrations, resulting in rising public debt and exacerbating the attendant risks related to interest payments and foreign exchange exposure.
“The 2025 budget’s capacity to foster sustainable economic growth and tackle Nigeria’s deep-rooted challenges is questionable.”
The presidential candidate of the Peoples Democratic Party (PDP) in the 2023 election listed a number of shortcomings in the budget proposal.
He identified weak budgetary foundations in the 2024 budget leading to underperformance and poor execution.
“By Q3 of the fiscal year, less than 35 per cent of the allocated capital expenditure for MDAs had been disbursed, despite claims of 85 per cent budget execution. This underperformance in capital spending, crucial for fostering economic transformation, raises concerns about the execution of the 2025 budget.”
He also identified a disproportionate debt servicing ratio in the proposed budget, which he said accounted for N15.8tr (33 per cent of the total expenditure).
This, he noted, is nearly equal to the planned capital expenditure (N16tr, or 34 per cent).
“Moreover, debt servicing surpasses spending on key priority sectors such as defence (N4.91tr), infrastructure (N4.06tr), education (N3.52tr), and health (N2.4tr).
“This imbalance will likely crowd out essential investments and perpetuate a cycle of increasing borrowing and debt accumulation, undermining fiscal stability,” he said.
Atiku maintained that the government’s expenditure target is unsustainable.
He flayed the observed disproportionately high recurrent expenditure with over N14tr (30 per cent of the budget) allocated to operating an oversized bureaucracy and supporting inefficient public enterprises.
He noted further that the proposal lacked concrete steps to curb wastage and enhance the efficiency of public spending, stressing that the trend could exacerbate fiscal challenges, leaving limited resources for development.
The former presidential candidate also cited insufficient capital investment allocation in the proposed budget.
“After accounting for debt servicing and recurrent expenditure, the remaining allocation for capital spending, ranging from 25 per cent to 34 per cent of the total budget, is insufficient to address Nigeria’s infrastructure deficit and stimulate growth. This equates to an average capital allocation of approximately N80,000 (US$45) per capita, insufficient to meet the demands of a nation grappling with slow growth and infrastructural underdevelopment.”
Atiku dismissed the administration’s tax and economic reforms as regressive.
He condemned the decision to increase the VAT rate from 7.5 per cent to 10 per cent, saying it’s a retrogressive measure that will exacerbate the cost-of-living crisis and impede economic growth.
Continuing, he said, “By imposing additional tax burdens on an already struggling populace while failing to address governance inefficiencies, the government risks stifling domestic consumption and further deepening economic hardship.
“In conclusion, the 2025 budget lacks the structural reforms and fiscal discipline required to address Nigeria’s multifaceted economic challenges.
“To enhance the budget’s credibility, the administration must prioritise the reduction of inefficiencies in government operations, tackle contract inflation, and focus on long-term fiscal sustainability rather than perpetuating unsustainable borrowing and recurrent spending patterns. A shift towards a more disciplined and growth-oriented fiscal policy is essential for the nation’s economic recovery.”
President Tinubu had on Wednesday presented a budget proposal of N49.7tr to the National Assembly for the 2025 fiscal year.
The budget proposal had scaled the second reading in the Senate and further legislative work on the document has been deferred till mid-January.
Our Reporter
