Former Vice President Atiku Abubakar has criticised the APC-led administration of President Bola Tinubu over its proposed 2025 budget, which heavily relies on external borrowing to finance a significant deficit.
In a statement issued on Sunday, Atiku, who contested the 2023 presidential election under the Peoples Democratic Party (PDP), accused the ruling party of continuing a trend of financial recklessness.
He expressed concern about the rising public debt, warning that such borrowing would jeopardise Nigeria’s economic stability and burden future generations.
Atiku described the government’s approach as lacking fiscal discipline and innovation, urging the administration to focus on policies aimed at reducing deficits and increasing revenue without resorting to excessive borrowing.
“The 2025 federal budget, amounting to N48 trillion with a revenue forecast of N35 trillion, resulting in a deficit exceeding N13 trillion or 4% of GDP, reflects a continuation of business-as-usual fiscal practices,” he 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 N13 trillion in new borrowings, including N9 trillion in direct borrowings and N4 trillion in project-specific loans.”
The former vice-president further highlighted lapses identified in the budget.
“Weak Budgetary Foundations: The 2024 budget’s underperformance signals poor budgetary execution. By Q3 of the fiscal year, less than 35% of the allocated capital expenditure for MDAs had been disbursed, despite claims of 85% budget execution,” he said.
Atiku noted that the underperformance in capital spending, crucial for fostering economic transformation, raises concerns about the execution of the 2025 budget.
“Disproportionate Debt Servicing: Debt servicing, which accounts for N15.8 trillion (33% of the total expenditure), is nearly equal to planned capital expenditure (N16 trillion, or 34%),” he said.
“Moreover, debt servicing surpasses spending on key priority sectors such as defence (N4.91 trillion), infrastructure (N4.06 trillion), education (N3.52 trillion), and health (N2.4 trillion).”
He said the imbalance would likely crowd out essential investments and perpetuate a cycle of rising borrowing and debt accumulation, threatening fiscal stability.
“Unsustainable Government Expenditure: The government’s recurrent expenditure remains disproportionately high, with over N14 trillion (30% of the budget) allocated to operating an oversized bureaucracy and supporting inefficient public enterprises,” he said.
Atiku added that the “lack of concrete steps to curb wastage and enhance the efficiency of public spending exacerbates the fiscal challenges, leaving limited resources for development.”
“Insufficient Capital Investment: After accounting for debt servicing and recurrent expenditure, the remaining allocation for capital spending, ranging from 25% to 34% of the total budget, is insufficient to address Nigeria’s infrastructure deficit and stimulate growth,” Atiku said.
He added that it amounts to an average capital allocation of about N80,000 ($45) per capita, insufficient to meet the demands of a country “grappling with slow growth and infrastructural underdevelopment.”
“Regressive Taxation and Economic Strain: The administration’s decision to increase the VAT rate from 7.5% to 10% is a retrogressive measure that will exacerbate the cost-of-living crisis and impede economic growth,” he said.
Atiku 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 exacerbating economic hardship.
According to Atiku, the 2025 budget lacks the “structural reforms and fiscal discipline” required to address Nigeria’s multiple economic challenges.
“To enhance the budget’s credibility, the administration must prioritize 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,” he said.
