……….Additional taxes will stifle domestic consumption, deepen hardship – Atiku
BY MYKE UZENDU AND DAVID ADUGE -ANI
The recently submitted 2025 budget proposals by president Bola Tinubu to the joint session of the National Assembly has been described as lacking in sincerity and capacity to address the nations current economic and social challenges
Recall that president Tinubu had last Wednesday, submitted the 2025 budget proposal of N49.7trn to the National Assembly, with defence infrastructure, education and health tipping in allocations
But the budget proposal has received several knocks, both from economic experts and politicians, with the gir et vice president, Atiku Abubakar, presidential candidate of the opposition Social Democratic Party (SDP), in 2023 elections, Adewole Adedayo, as well as founding member of the ruling All Progressives Congress (APC), and immediately past Director General of Voice of Nigeria (VON), Osita Ikechukwu, raising concerns about the capability of the budget to address the nations challenges
Former vice president, Atiku Abubakar has said he N49 trillion 2025 budget estimates lacks the capacity to foster sustainable economic growth and tackle Nigeria’s deep-rooted challenges.
Atiku in a statement he issued on Sunday, regretted that the federal government has not moved away from it’s past in financial dealings, even as he described the budget as a continuation of “business-as-usual fiscal practices,” that has remained incapable of fostering sustainable growth or addressing Nigeria’s developmental deficits.
He noted that with a revenue forecast of N35 trillion, the 2025 budget projects a deficit exceeding N13 trillion, equivalent to 4% of the nation’s Gross Domestic Product (GDP), adding that the administration plans to borrow over N13 trillion, comprising N9 trillion in direct borrowings and N4 trillion in project-specific loans to remedy the shortfall.
Atiku, who also contested against president Nola Tinubu on the platform of the opposition People’s Democratic Democratic Party (PDP), during the 2023 general elections, criticized this reliance on debt, arguing that it mirrors the unsustainable borrowing trends of past administrations, which have led to spiraling public debt, increased interest payments, and foreign exchange vulnerabilities.
This is even as he pointed to the poor execution of the 2024 budget as a warning sign for 2025, adding that by the third quarter of 2024, less than 35% of the allocated capital expenditure for Ministries, Departments, and Agencies (MDAs) had been disbursed, despite claims of 85% budget execution.
“This underperformance in capital spending undermines the government’s ability to deliver transformative projects,” Atiku said, expressing doubts over the government’s ability to meet its 2025 objectives.
The former vice president, who similarly raised concerns about disproportionate debt servicing, regretd that debt servicing will consume N15.8 trillion, or 33% of total expenditure, nearly equaling the N16 trillion earmarked for capital projects.
He noted that debt servicing outpaces allocations for key sectors such as defence (N4.91 trillion), infrastructure (N4.06 trillion), education (N3.52 trillion), and health (N2.4 trillion, warning that such misallocation could stifle development and perpetuate cycles of borrowing.
Atiku criticized the spending on what he called an “oversized bureaucracy” and inefficient public enterprises, saying it left little room for development investments.
“Without addressing inefficiencies and reducing waste, the government is undermining fiscal stability,” he noted.
He noted that the allocation for capital spending, ranging from 25% to 34% of the total budget is inadequate to address Nigeria’s infrastructure deficit.
With per capita capital allocation averaging just N80,000 (approximately $45), Atiku argued that the budget lacked the transformative capacity needed to stimulate growth and tackle Nigeria’s infrastructural and economic challenges.
The former vice president criticized the administration’s decision to increase the Value Added Tax (VAT) rate from 7.5% to 10%, describing it as a “retrogressive measure” that would worsen the cost-of-living crisis.
He argued that imposing additional tax burdens on struggling Nigerians, without addressing inefficiencies in governance, would stifle domestic consumption and further strain the economy.
The former vice president therefore advised that the government must make a departure from unsustainable borrowing, which he said has plunged the nation into a huge debts, and concluded that the 2025 budget fails to provide the structural reforms or fiscal discipline needed to address Nigeria’s multifaceted challenges.
“The government must prioritize reducing inefficiencies, tackling contract inflation, and pursuing long-term fiscal sustainability,” he said.
“Nigeria needs a credible budget that reflects the realities of our challenges and offers solutions rooted in efficiency, accountability, and growth,” he said.
Similarly, the presidential candidate of the Social Democratic Party (SDP) in the 2023 general elections, Prince Adewole Adebayo, described the 2025 budget proposals as being full of contradictions and unrealistic expectations.
Adebayo accused the government of insincerity, by highlighting the exchange rates fixed in the budget and inflation projections as unrealistic.
“The proposals are self-contradictory. For example, they are working towards 15% inflation. Any basic microeconomist knows that you must never have double-digit inflation,” he said.
He also hit hard on the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, for describing Nigeria’s “cap in hand” borrowing as a good day.
He said, “It is not a good day when the finance minister believes the day he goes borrowing in London is a good day. No minister that we had in the past will say the day we went borrowing was a good day,”
On Nigeria’s borrowing practices, he noted that while other nations like the United States borrow, they do so in their own currency. “When you are borrowing Eurobonds and foreign currencies, it is a sign of crisis. You can do it, but you shouldn’t celebrate it as a good day,” he argued.
Also in his Save Our Soul (SOS) message to president Bola Tinubu, former Director General of Voice of Nigeria (VON), Osita Okechukwu urged the federal government to pull Nigerians away from Debt Trap and allow the nation to breath if president Tinubu must fulfill jis Renewed Hope Agenda and allow us to breathe
Okechukwu, a foundation member of the APC said, after perusing the 2025 national budget, he had no other choice than to appeal to President Bola Ahmed Tinubu, GCFR, to as a matter of urgent national importance to save the nation from further debts
He lamented that he cannot factor how the Renewed Hope Agenda will bring the intended succor to Nigerians when we are owing all manner of debts both local and foreign, prohibitive interest rate of treasury bills, plus dangerous dollar denominated loans, and short term EuroBond; therefore the imperative of Fiscal Restructuring of Debt Service.
The APC chieftain reminded the President, that “for Benjamin Franklin admonished us that he who goes a borrowing goes a sorrowing; hence the imperative of setting up a high powered panel of inquiry to reexamine our debts so as to unravel genuine and less than transparent debt transactions.”
He cautioned that huge debt burden is a threat to our nascent democracy and will drain resources meant for health, education and poverty alleviation. And regrets that the budget for Defence(N4.91tr);
Okechukwu acknowledged that there is no more fuel subsidy, kudos to Mr President; unfortunately humongous debt service has become the new elephant anti-production in the room
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“Yes, fuel subsidy is gone, albeit fuel subsidy regime which had links with the planlessness and squandermania that governed the sordid debt exercise. Or do we forget outliers like when Dr Iweala, WTO President instituted a panel which probed and found out that the fuel subsidy was riddled with corruption, upon which the culprits resorted to kidnap of her mother?
“Accordingly Mr President should dust up Iweala’s file and other bad loan files with the intendment to recover monies and return Nigeria to productive economy
“it is with nostalgia one recalls that the first loan Nigeria borrowed from Paris Club was $13.1 million in 1964 for the construction of Niger Dam and the Nigeria’s debt relief deal with same Paris Club of creditors under President Olusegun Obasanjo’s administration in 2005.
“Our cancelled debt in December 2004 was $35.994 billion and paradoxically our debt burden today is N121.67 trillion equivalent of $91.46 billion USD.
“And the only break fetters of debt burden like in 2005 is fiscal restructuring in other words high power multilateral panel of inquiry to ascertain our actual debt and look for debt cancellations