Professor Ofili Ugwudioha, a Professor of Accounting at Nile University of Nigeria, Abuja, has criticised Nigeria’s budgeting framework, describing it as outdated and responsible for the country’s persistent deficit challenges.
Speaking in an interview on ARISE News on Sunday, Ugwudioha said Nigeria’s reliance on an old budgeting model continues to undermine fiscal sustainability and efficient public spending.
“This type of budgeting system is very archaic, is very old, is the type of budgeting system that was in vogue around 100 years ago,” he said.
He explained that the current incremental budgeting approach, where new budgets are built on previous figures with percentage increases, contributes significantly to rising deficits and weak financial planning.
Highlighting figures from the 2026 budget, Ugwudioha noted that projected revenue falls far below planned expenditure.
“I saw that we are earning around, or we are going to earn around 34 trillion. That threw us into a deficit budget of 24 trillion,” he said.
“If you look at these two, you see that we are earning 34 and we are spending 68, which means our deficit is 24.”
He described the deficit level as excessive and unsustainable.
“This is too high,” he said.
“I always say that deficit budgeting cannot be more than 20 to 25 percent, so that you will be able to repay.”
The professor, however, acknowledged a positive shift in the structure of the 2026 budget, particularly the increase in capital expenditure.
“From my own analysis, the government has done well by increasing the capital aspect of the budget to almost 50 percent,” he said.
“It is far, far better than what was happening, because in the past it used to be 30 percent for capital and 70 percent for the current.”
He added that capital expenditure plays a crucial role in national development, covering infrastructure, education, health, and security.
Despite this improvement, Ugwudioha stressed that structural issues in budget implementation continue to hinder results.
“The problem we have in our budgeting system is that there is no strong budget evaluation and monitoring unit,” he said.
“It’s because of the lack of this institutional evaluation and monitoring unit that you see a lot of abandoned projects here and there.”
He argued that the absence of independent oversight leads to waste, inefficiency, and repeated allocation of funds to projects that remain uncompleted.
“You cannot evaluate yourself because you are the one who did the job,” he said.
“There must be an independent body that will evaluate what you have done and give report to government.”
Ugwudioha also criticised the extension of the 2025 capital budget into 2026, describing it as a violation of fiscal discipline.
“Budget is meant for 12 months, January to December,” he said.
“The budget should run within that period.”
“And anything that remains there that is not done until 31st December should be stopped.”
On external pressures, including the impact of global tensions such as the US-Iran conflict, he warned that Nigeria remains vulnerable due to weak economic structures.
“It is actually vulnerable, but there is also a way to cover it if we are actually doing what we should do as a government,” he said.
He further criticised monetary policy, particularly high interest rates, which he said discourage investment and economic growth.
“Increasing NPR when you know that increase in NPR will discourage investment,” he said.
Ugwudioha also pointed to structural weaknesses in Nigeria’s oil and refining sector, noting that reliance on external factors continues to expose the economy to shocks.
“It is difficult for government to guarantee Dangote reduce the price of your product,” he said.
He concluded by urging the government to prioritise policies that support productivity rather than short-term relief measures.
“Don’t give money. Give something that will enable Nigerians to work,” he said.
“Nigerians are not lazy. They can produce.”
