The Nigerian Economic Summit Group (NESG) has described the 2025 federal budget as inadequate to meet critical social and infrastructure demands.
It made the observation in its latest report titled “2025 FGN Budget Analysis: Can The Budget Deliver a Major Economic Boost”.
The NESG said it observed that public investment continues to be treated as a “residual budget item,” receiving only leftover funds after recurrent expenditures are covered, adding that it had consistently disrupted the execution of multi-year infrastructure and social development programs.
Between 2015 and 2024, total government spending averaged just 13.1 per cent of the country’s Gross Domestic Product (GDP), far below the global average of 30 per cent and even below the Sub-Saharan African (SSA) average of 21.2 per cent.
According to the report, the federal government earmarked N27.96 trillion, representing 50.8% of the N54.99 trillion 2025 budget for recurrent spending, which includes debt servicing and non-debt recurrent expenditure. Meanwhile, capital expenditure, which covers critical public investments and social infrastructure, received 49.2% of the budget.
It said, “This chronic underinvestment limits the country’s ability to build human capital, develop infrastructure, and drive economic diversification.
“In addition, the current operational public finance management framework of the Federal Government of Nigeria (FGN) is considered less effective in ensuring the government’s annual budget plays its economic stabilisation and balancing role. Thus, the process has continuously yielded less optimal conditions of anticipated economic returns and improvement in the social welfare of the citizens.
“In this state, the size of the public expenditure is not as important as the government being effective in resource mobilisation and allocation.
“A review of FGN’s 2025 budget disclosed that the government is intentional about using its expenditure to boost aggregate demand, support output growth, and drive overall economic development in the year.”
Aside from the historic high value of the budget, the group said the capital expenditure was notably more than recurrent expenditure (non-debt).
“A key feature of the 2025 budget is its ambitious fiscal expansion, prioritising infrastructure development, debt servicing, and increased allocations to statutory bodies, including newly established regional development commissions.
“However, the three underlying issues affecting budget performance in the last decade also exist in this year’s budget. The issues are the efficiency of public expenditure, revenue optimisation, and growing debt servicing, which continue to hamper economic growth every year,” the group added.
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The Group also raised concerns over Nigeria’s low per capita public spending, especially when compared to peer economies.
With a 2025 budget of N54.99 trillion (approximately US$36.7 billion) and a population estimated at 230 million, the per capita allocation stands at just N239,087 (around US$159.4) annually.
This figure pales in comparison to South Africa’s public spending of about US$1,957 per capita and even falls significantly below the average US$800 per resident among other peer countries.
In critical sectors like health and education, budget allocations remain worryingly low. The federal government allocated only N2.38 trillion (US$1.49 billion) to health services and less than N2.59 trillion (US$1.62 billion) to education services for 2025.
The NESG warned that such underfunding in vital sectors could have long-term adverse effects on Nigeria’s economic competitiveness, human capital development, and poverty reduction efforts.
“These figures indicate that Nigeria’s budgetary provisions are grossly inadequate to address pressing social and infrastructure needs,” the group noted.
