FG justifies 2025 budget increase, says more revenue streams identified

Atiku Bagudu, minister of budget and economic planning, has provided details on the rationale for the upward review of the 2025 budget.

Bagudu spoke to journalists on Wednesday while seeing off President Bola Tinubu at the Nnamdi Azikiwe International Airport as he departed for France.

Earlier today, Tinubu asked the national assembly to increase the proposed 2025 budget from N49.7 trillion to N54.2 trillion.

Speaking to journalists, Bagudu linked the increase to the collaborative efforts between the executive and legislative arms to enhance revenue generation for the “record-breaking” N49.7 trillion budget, dubbed the ‘Budget of Restoration: Securing Peace, Rebuilding Prosperity’.

The minister said committees on appropriation, national planning, and finance worked closely with the executive to identify additional revenue streams.

“You will recall Mr. President submitted a N49 trillion budget to the national assembly, and legislative work commenced,” he said.

“In this process, it was established that institutions like the Federal Inland Revenue Service (FIRS), government-owned enterprises, and the Customs Service can generate over N4.5 trillion more than initially projected.”

Bagudu said the additional revenue would be strategically allocated to critical sectors to foster economic diversification and growth. 

“The President guided that this additional revenue should be used to strengthen the Bank of Agriculture, Bank of Industry, support diversification programmes through investments in solid minerals, and fund infrastructure projects,” he said.

Bagudu also addressed amendments to the medium-term expenditure framework (MTEF), which initially supported a smaller budget size. 

“The MTEF that was approved earlier was for a budget of less than N49 trillion. Consequential amendments will follow to align with this ambitious fiscal plan,” he said.

“The 2025 budget reflects a significant 41.9% increase from the previous year’s ₦35 trillion allocation. 

“However, it comes with challenges such as a projected deficit of ₦13.39 trillion, which will be financed through debt (69%), loans (28%), and asset sales (2%).”

Despite the challenges, Bagudu expressed confidence in the government’s ability to meet its ambitious revenue target of N36.35 trillion through improved tax administration and reforms in revenue-generating agencies.

During the presentation of the budget to the national assembly in December 2024, Tinubu said the 2025 budget would prioritise key areas such as defense and security (N4.91 trillion), infrastructure (N4.06 trillion), education (N3.52 trillion), and health (N2.48 trillion). 

He also set the budget targets to reduce inflation from 34.6 percent to 15 percent and stabilise the naira exchange rate at N1,500 per dollar.