Atiku criticises 2025 budget, warns of deepening economic challenges

Former Vice President Atiku Abubakar has criticised the 2025 budget, describing it as a continuation of “business-as-usual” fiscal practices under the APC-led administration.

In a statement on X yesterday, Abubakar expressed concern over the N48 trillion budget, which includes a revenue forecast of N35 trillion and a projected deficit of over N13 trillion, or four per cent of GDP. He noted that this deficit reflects a persistent trend of increasing reliance on external borrowing since 2016.

The administration plans to raise more than N13 trillion in new borrowings to bridge the fiscal gap, with N9 trillion earmarked for direct borrowings and N4 trillion for project-specific loans.

Abubakar argued that this borrowing strategy mirrors that of previous administrations, leading to rising public debt and increased risks related to interest payments and foreign exchange exposure.

The former Vice President questioned the budget’s ability to foster sustainable economic growth, pointing to several concerns, including weak budgetary foundations, disproportionate debt servicing, and unsustainable government expenditure.

He highlighted the underperformance of the 2024 budget, where less than 35 per cent of capital expenditure for Ministries, Departments, and Agencies (MDAs) had been disbursed by Q3, despite claims of 85 per cent budget execution. This, he said, raised doubts about the effective execution of the 2025 budget.

Abubakar also noted that debt servicing would consume N15.8 trillion, or 33 per cent of the total expenditure, nearly equal to the planned N16 trillion for capital expenditure. He warned that this imbalance could crowd out essential investments and further exacerbate Nigeria’s fiscal instability.

Furthermore, he expressed concern over the government’s high recurrent expenditure, which accounts for over N14 trillion, or 30 per cent of the budget, funding an oversized bureaucracy and inefficient public enterprises. He argued that without concrete steps to reduce waste and improve the efficiency of public spending, Nigeria’s development would remain hindered.

On taxation, Abubakar criticised the administration’s decision to raise VAT from 7.5 per cent to 10 per cent, calling it a regressive measure that would worsen the cost-of-living crisis and hinder economic growth. He said the increased tax burden, combined with governance inefficiencies, could stifle domestic consumption and worsen the economic hardship faced by many Nigerians.

In conclusion, Abubakar called for structural reforms and fiscal discipline to address Nigeria’s economic challenges. He urged the government to reduce inefficiencies, tackle contract inflation, and focus on long-term fiscal sustainability rather than continuing a cycle of unsustainable borrowing and recurrent spending. He stressed that a shift towards a more disciplined and growth-oriented fiscal policy was crucial for the country’s economic recovery.