Experts insist 2025 growth target may not address development gaps, poverty
The projected 4.6 per cent gross domestic product (GDP) suggested by the 2025 budget, even if it is achieved, will not be enough to reduce poverty and create more jobs, experts have said.
Delivering a paper, ‘2025 FGN Budget: Budget of Restoration: Securing Peace, Rebuilding Prosperity’, in Abuja at the second Joint Workshop on the 2025 national budget, organised by the Association of National Accountants of Nigeria (ANAN) and the Chartered Institute of Taxation of Nigeria (CITN), a development economist and public accountant, Prof. Chiwuike Uba, faulted government’s desire to increase taxes amid growing poverty, observing that while Nigerians are struggling with a high cost of living, the drive to increase revenue at all costs may exacerbate the current situation.
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, believed that 4.6 per cent growth is inadequate to drive economic development. He admitted that Nigeria ought to target about seven per cent annual GDP growth to significantly reduce poverty and drive economic transformation.
Uba faulted the perpetual habit of hiding projects under ministries, departments and agencies (MDAs), which have no mandate for such projects, in the guise of constituency projects. He noted that the allocations to recurrent expenditure exceed allocations to capital expenditures, which is not enough to drive the reform priorities.
While the government thinks the 2025 budget is strong enough to incentivise manufacturing, Uba thinks that the federal ministries driving the rejuvenation – Industry and Investment, Science and Technology and Education – are not allocated sufficiently for capital expenditure.
“Out of the total budget of N1,221,861,984,128 for the Federal Ministry of Regional Development, only N24,882,409,997, representing two per cent, is for capital expenditure. Outside the North East Development Commission (NEDC), with a total budget of N300.907 billion, comprised of N290.998 billion personnel expenditure and N9.909 billion capital expenditure, all other regional development commissions’ total budgets are for personnel expenditure. SEDC (N140 billion), NWDC (N145 billion), SWDC (140 billion), NDDC (N626.5 billion) and NCDC (N140 billion). MDAs’ capital budgets are largely for construction of buildings, purchase of vehicles, furniture and computers,” he said.
According to him, lawmakers getting N344.85 billion, an increase from N197.93 billion in 2024, is seen largely by Nigerians as ‘insensitive’.
“The State House budget allocated over N7 billion for travel and transport alone, along with N4.7 billion for the purchase of motor vehicles and with hefty allocations for refreshments and media expenses is also unjustifiable in a struggling economy,” he said. He submitted that fiscal consolidation through a reduction in the cost of governance and an increase in absorptive capacity will help moderate inflation.
Other steps that can help stabilise the economy include a progressive reduction in the reliance on oil revenues by investing in agriculture, technology, and tourism.
“This includes supporting small and medium enterprises (SMEs) through favourable policies and enhancing sector-specific support (examples agricultural and manufacturing sector grants and tourism infrastructure). Strengthen tax collection through reforms that target widening the tax base and improving efficiency.
Implement digital tax administration systems to minimise leakages and enhance compliance. Enhance transparency and accountability in tax collection and government spending through mechanisms like the implementation of e-government platforms and open government initiatives,” he stated.
He urged the government to take a conscious step to align the budget with the SDGs by conducting a comprehensive mapping of budget allocations to SDGs to ensure that critical sectors (health, education and environment) receive adequate funding.
According to him, the government must actively engage civil society organisations and stakeholders in the budget planning process to ensure that budget allocations align with community needs and aspirations related to sustainable development.
Partner and Head, Tax, Regulatory and People Services, KPMG, Tayo Ogungbenro, in his paper ‘2025 National Budget: Comparative Analysis, Expected Performance and Citizens’ Expectations’ advocated a shift from historical spending towards a performance-based budgeting approach, where funds allocation is based on achieving measurable outcomes and impact rather than historical expenditures.
He urged the government to establish robust monitoring and evaluation frameworks that track budget implementation and assess the impact of expenditures on development outcomes.
He agreed with Uba that there is a need for the government to increase budget allocations to education and healthcare to meet the 15 per cent public spending target set by the African Union for education and to align healthcare spending with World Health Organisation recommendations for developing nations.
To tackle unemployment and under-employment, Ogungbenro called for the implementation of a large-scale Vocational and Technical Training programme (TVET) to equip youths with the necessary skills for the job market, promoting economic growth and addressing unemployment, arguing that evidence from the World Bank indicates that TVET can significantly increase employability.
He noted that investments in infrastructure through PPPs, particularly in roads, power and digital infrastructure, can stimulate economic growth and improve public service delivery. He maintained that creating a legal framework that encourages private investment in public services is crucial at this time.
