Concerns have been raised over fiscal discipline following the request by President Bola Ahmed Tinubu to spend N43.56 trillion capital allocations for the 2024 and 2025 budgets.
The Appropriation Acts for the two years have been largely impaired over inadequate cash-backing resulting in roll-over.
The president on Friday presented the N58.46 trillion 2026 budget proposals to the National Assembly, the 2024 and 2025 budgets which have performed below expectations were rolled over till March 2026.
He had said the N43.56 trillion Appropriation (Repeal and Re-enactment) Bill for the 2024-2025 fiscal period which he presented to the legislature was to end the practice of running multiple budgets concurrently and strengthening accountability in public finance management.
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However, economists have expressed doubt over the feasibility of the proposed spending amidst the poor performances of the two budgets.
Tinubu had stated while presenting the budget on Friday that only about 17 per cent of 2025 capital budget, equivalent to N3.1 trillion, had been released by the third quarter of the year.
He said this was due to the government’s focus on completing priority projects under the 2024 budget.
However, according to the fourth quarter report of the 2024 budget, N5.81 trillion was released for capital projects, with 81.91 per cent utilised by the Ministries, Departments and Agencies (MDAs).
The report published by the Budget Office showed that the fiscal deficit was N9.18 trillion, financed through domestic borrowing. Debt-to-GDP rose to 61.22%.
The report added, “Federal Government revenue totaled N20.78 trillion (66.59% higher than 2023 but 19.68% below the target). Oil revenue underperformed at N15.07 trillion, while non-oil revenue outperformed at N16.09 trillion. Expenditure was N27.47 trillion. Non-debt recurrent spending stood at N8.53 trillion; debt service reached N11.03 trillion. N5.81 trillion was released for capital projects, with 81.91% utilized by MDAs. The fiscal deficit was N9.18 trillion, financed through domestic borrowing. Debt-to-GDP rose to 61.22%.”
However, as of the time of filing this report, no report on the 2025 budget performance was found on the budget office website.
According to the president, the 2024 Appropriation Act of N35.06 trillion is to be repealed and re-enacted at N43.56 trillion. The revised figure comprises N1.74 trillion for statutory transfers, N8.27 trillion for debt service, N11.27 trillion for recurrent (non-debt) expenditure, and N22.28 trillion for capital expenditure and development fund contributions for the year ending December 31, 2025.
Similarly, the president proposed the repeal of the 2025 Appropriation Act of N54.99 trillion and its re-enactment at N48.32 trillion.
Tinubu said the reworked 2025 budget consisted of N3.65 trillion for statutory transfers, N14.32 trillion for debt service, N13.59 trillion for recurrent (non-debt) expenditure, and N16.71 trillion for capital expenditure and development fund contributions.
The re-enacted 2025 budget is expected to run until March 31, 2026 instead of December 31, 2025.
President Tinubu explained that the proposed repeal and re-enactment were intended to accommodate budget items not previously recognised and to reflect a revised capital implementation target of 30 per cent.
Economists express doubt over fiscal sustainability
Economists, who spoke to Daily Trust at the weekend, expressed divergent views over the Federal Government’s proposal to spend about N43.56 trillion to deliver the 2024 and 2025 budgets within a compressed timeline ending in March 2026, with concerns centering on feasibility, fiscal sustainability and funding realism.
Dr Lawal Wasiu Omotayo of the Department of Economics, Al-Hikmah University Ilorin, warned that the plan raises “serious feasibility and fiscal sustainability concerns.”
According to him, “From the macroeconomics perspective, the proposal to spend N43.56 trillion to simultaneously deliver the 2024 and 2025 budgets by March 2026 raises serious feasibility and fiscal sustainability concerns.”
He noted that Nigeria’s historical challenges with budget execution could be magnified by attempting to run two large budgets concurrently.
“Nigeria has historically struggled to achieve high budget performance within a single fiscal year due to late budget passage, revenue shortfalls, procurement bottlenecks and weak institutional coordination.
“Attempting to execute two large budgets within an overlapping and compressed timeframe would significantly strain administrative capacity, potentially leading to rushed spending, poor project selection and low value for money,” he said.
Omotayo added that evidence from Nigeria and other developing economies shows that accelerated spending often weakens outcomes.
“Empirical evidence suggests that accelerated expenditure schedules often undermine efficiency and transparency rather than improve outcomes,” he stated.
On financing, he questioned the fiscal logic of the proposal.
“Financing N43.56 trillion within a short horizon would likely depend on optimistic revenue projections, increased borrowing and asset reallocation,” he said, warning that Nigeria’s already heavy debt service burden could worsen.
“Additional borrowing could exacerbate fiscal vulnerabilities, crowd out social and capital spending in future years and weaken macroeconomic stability.”
He also expressed doubts about revenue assumptions.
“Oil revenue remains volatile, tax to GDP ratios are low and borrowing space is constrained,” Omotayo said, adding, “Without a transparent financing framework, the proposal appears fiscally ambitious but weakly anchored in realistic revenue assumptions.”
On fuel subsidy removal, he said savings should have translated into visible gains.
He said: “Savings from subsidy reforms should be transparently redeployed to productive and pro poor expenditures. The perceived poor performance of the 2024 and 2025 budgets raises questions about whether subsidy savings have been adequately ring fenced, efficiently allocated and effectively spent.”
While acknowledging the political appeal of accelerated spending, Omotayo concluded that the plan was imprudent.
“Executing two large budgets simultaneously does not appear realistic or fiscally prudent under current conditions,” he stressed, calling instead for improved budget credibility, stronger revenue mobilisation and better institutional capacity.
Another economist, Dr. Muhammad Bashir Yusuf, also of Al-Hikmah University Ilorin, described the proposal as largely impractical within the stated timeframe.
“A few days ago, President Tinubu sent something to the House to terminate the 2024 budget so that we do not have multiple budgets running concurrently,” Yusuf said.
“I don’t see the feasibility of spending such a huge amount, almost a whole year’s budget. Where will the government get it from, except they want to deplete our external reserves, which does not make sense.”
He questioned both revenue availability and spending capacity.
“I don’t think it is feasible to get over N43 trillion between now and March, which is just about three months. And how do you even spend such an amount within such a short period. At best, this is just a political statement” the economist submitted.
However, Yusuf argued that savings from subsidy removal had been channelled into stabilising the economy.
“Before this government came, the previous administration was borrowing to pay salaries and accumulated debts, including airline obligations.
“The present administration has started offsetting these and has also built external reserves to about 44 billion dollars, a seven year high,” he added.
According to him, the improved reserves have strengthened Nigeria’s economic standing.
“This means we can now cover about ten months of imports and other countries will begin to respect us. No speculator can easily attack our currency again because we can defend it,” Yusuf said.
He linked the naira crisis to weak reserves.
“We floated the naira because we could not defend it. Speculators attacked the currency when reserves were low, pushing it to around N2,600 to a dollar. With recent measures, it has come down to about N1,400.”
Yusuf defended borrowing within limits.
“There is no country that does not borrow, including the United States. What economists look at is the borrowing to GDP ratio. If it is manageable, say below 20 percent, then it is acceptable, which is our situation. When infrastructure improves and investment comes in, revenue will also increase,” he said.
‘Ambitious but fiscally challenging’
A development economist and public finance analyst, Sadiq Muhammad, described the target as ambitious but fiscally challenging.
He said while the intention to fast-track capital and recurrent expenditure was commendable, the scale and timing of the proposed spending raised serious concerns about feasibility, funding sources and macroeconomic stability.
Muhammad said delivering two budgets within such a short timeframe would require “extraordinary revenue inflows or aggressive borrowing,” both of which come with significant risks.
“From a fiscal standpoint, implementing N43.56 trillion worth of expenditure in less than two years is extremely difficult, given Nigeria’s historical budget performance, revenue constraints and debt servicing obligations,” he said.
He noted that Nigeria has consistently struggled with low budget implementation, particularly on the capital side, adding that revenue projections have often fallen short due to oil production challenges, weak non-oil revenue mobilisation and persistent leakages.
On where the funds would come from, the economist said government options were limited to increased borrowing, higher taxes, asset sales or exceptional oil revenue, warning that excessive borrowing could worsen the country’s already fragile debt profile.
“Nigeria is already spending a significant portion of its revenue on debt servicing. If the government plans to fund this through borrowing, it will place more pressure on public finances and potentially crowd out private sector investment,” he said.
Muhammad also questioned the handling of savings from the removal of fuel subsidy, noting that transparency around the utilisation of the funds remained a major issue.
"One would have expected that the savings from fuel subsidy removal would have been clearly channelled into optimising the implementation of the 2024 and 2025 budgets, particularly in infrastructure, health, education and social protection,” he said.
According to him, the poor performance of the 2024 and 2025 budgets so far suggests either weak fiscal coordination or diversion of expected revenues into unproductive or opaque spending.
“The key concern is accountability. Nigerians need clarity on how much has been saved from subsidy removal, where the money has gone, and why budget implementation has remained sluggish despite the fiscal space created,” he added.
The economist advised the Federal Government to prioritise realistic budgeting, improve revenue mobilisation, cut wasteful spending and publish detailed reports on subsidy savings to restore public confidence.
“Without transparency, fiscal discipline and strong institutions, spending large sums alone will not translate into meaningful development,” he said.
Other experts who spoke anonymously called for the need to have laws that would set guidelines on presentation of the budget to the National Assembly.
They also lamented the operation of multiple budgets in the country, saying it exposes the federal government’s lack of coordination in meeting its medium and long term goals.
One of them noted that the country is operating three multiple-year budgets.
He expressed optimism over the promise by the president to ensure that 2026 budgets experience a stronger discipline.
“He used that word, ‘stronger budget discipline’. So he recognises that there have been challenges in the past.
“Now, the budget was presented on the 19th. Ideally, lawmakers should have three months to interrogate the document. So that way it is, going to be rushed. That is also part of why we are having challenges in the budgetary process. So, I agree that there should be clear timelines. But unfortunately, we don’t have any document today that specifies those clear timelines,” he said.
He said Section 11 of the Fiscal Responsibility Act of 2007 only talks about the MTEF and says the MTEF should be submitted in four months.
“But there is nothing on the budget itself, which is also why I have argued several times that there is a need to have a piece of legislation. Section 182 of the Fiscal Responsibility Act, we can consolidate them into a budget law. We don’t have an organic budget law in the country today that guides budget preparation and execution. So when we have that budget law, it will help to specify these timelines,” he added.
He also urged the government to be cautions on the pace of accumulation of its debt that has ballooned from N11tr in 2014 to N152trn.
“The pace of accumulation of the debts, and another thing that’s of concern to me is the structure. The instruments that we are using to contract these debts are the FGN bonds. FGN bond today is accounting for about 78% of total domestic debt and when you borrow using FGN bond, it’s not tied to any specific project,” he said.
Another financial expert said the partial implementation of the 2025 budget led to some ministries barely paying their current expenses, salaries and overheads.
While referring to the Renewed Agenga Fund, he said there cannot be any meaningful budget implementation if the whole resource that is shared, the portion of government, does not go into the Consolidated Revenue Fund, adding that the country cannot have a separate account.
He added that the previous administration for about three years running was able to stick to the January to December cycle of budget presentation which ensured it was submitted around September or October to allow lawmakers have three months to scrutinize it.
“So, if the government insists that the budget will be signed by end of the year so that it is operational by first, then it becomes even more problematic. I don’t know what kind of discussion would have taken place. They are already closing already for Christmas. So how many days will they spend? Budget is a serious business. So these are ominous signs and we are already missing it.”
He added that if there are no rigorous discussions on the budgets, the sources of funds, the areas where these funds are to be deployed, the projects, the government cannot commit to it.
No response from AGF, N/Assembly
Efforts by the Daily Trust to get the response of the Attorney General and Minister of Justice, Lateef Fagbemi did not yield result. The media aide to the Minister, Kamarudeen Ogundele did not reply to messages or calls.
The situation is the same at the National Assembly. This is coming at a time when some pundits are questioning why both the Senate and the House of Representatives did not interrogate the poor performance of the the budgets put together by the present administration despite removal of fuel subsidy, floating of the naira and increased domestic and foreign debts. https://dailytrust.com/doubts-over-n43-56trn-2024-2025-budgets/?noamp=available |
