The proposed borrowing of about N9.3 trillion through discretionary loans to partially finance the N13.4 trillion deficit in the 2025 budget could worsen Nigeria’s debt problem, according to Professor Uche Uwaleke, Director of the Institute of Capital Market Studies at Nasarawa State University Keffi.

Other sources of funding for the deficit, according to the proposed budget, include asset sale/privatization proceeds, which will contribute N312 billion, and N3.8 trillion to be raised through multilateral/bilateral project-tied loans.

Currently, Nigeria has a debt burden of N134.3 trillion ($91.3 billion) as of the end of the second quarter of 2024.

The Professor of Capital Market said that, in order to avoid compounding the already huge debt burden the country is facing, every effort should be made to ensure that all long-term funds sourced from the debt capital market are tied to self-liquidating projects.

Prof. Uwaleke, who raised a number of concerns about the proposed 2025 budget, urged the National Assembly to carefully scrutinize the budget.

He said that a thorough review of the line items that make up service-wide votes and capital supplementation could free up significant funds that could be channeled to other critical areas such as agriculture and solid minerals.

“For instance, the National Assembly should interrogate the composition and rationale for the ‘margin for increase in costs and recurrent adjustment (N12 billion) as well as the line item tagged ‘contingency recurrent’ (N36 billion),” he noted, adding, “Curiously, the same figures appeared under service-wide votes in 2024. Equally, under capital supplementation is a line item known as ‘contingency capital (N200 billion), which also featured in the 2024 budget for the same amount. The opaque description of these items as well as their presentation calls for closer scrutiny.”

He wondered why projects are merely listed as ‘ongoing’ without stating the completion target expected in 2025.

He identified 10 projects listed under the Ministry of Transport as ‘ongoing,’ for which the sum of N42 billion is earmarked.

These include the completion of the Abuja-Kaduna railway project; Lagos-Ibadan and its associated additional works; rehabilitation of the Itakpe-Ajaokuta rail line and ‘construction of 12 Nos station buildings and track laying works at railway ancillary facilities areas Agbor.’

Others include ‘installation of signal and telecommunication systems on the Itakpe-Ajaokuta-Warri railway line, installation of acoustic sensing security surveillance systems for the Abuja (Idu)-Kaduna and other security gadgets,’ as well as completion of feasibility studies for new standard gauge rail lines.

“To see the shortcomings in this presentation, most of these projects also featured in the 2024 budget breakdown, where a provision of N33 billion was made,” he said. “Even the ‘feasibility studies for new standard gauge rail lines listed as completed in the 2024 budget are also appearing to be completed in the 2025 budget!”

“Besides, the document was silent on the completion stages of these projects and did not indicate how much each of these projects would cost. This sort of narrative does not allow for a correct assessment of progress made in the projects’ execution.”

Uwaleke said the same presentation flaw is observed with respect to projects listed under the Ministry of Works in the 2025 budget, where about N290 billion has been allocated for the rehabilitation/repair of roads. For example, the sum of N1 billion each has been provided for the ‘ongoing’ construction of the Rijiya Gusau Road in Zamfara State and the Nsukka-Obollo-Afor-Ehamafu-Nkalagu road in Enugu State.

“It stands to reason that long-term projects such as roads or railways spanning several years should first be included in a country’s perspective plan (or at least a medium-term plan) indicating timelines, and then each year, the annual budget draws from it, showing (preferably in kilometers as opposed to ‘sections’) achievable targets. This renders the use of ‘ongoing’ a poor indicator to have in an annual budget,” he said.

“It bears repeating that for the budget information to discipline fiscal actions, it must be transparent. This demands the avoidance of opaque and arbitrary language to enable the electorate to verify the budget information as well as monitor performance.”