The Nigerian Economic Summit Group (NESG) has criticised the 2025 federal budget, describing it as insufficient to meet the country’s critical social and infrastructure needs. This observation was made in the group’s latest report titled “2025 FGN Budget Analysis: Can the Budget Deliver a Major Economic Boost?”
The NESG expressed concern that public investment continues to be treated as a “residual budget item,” receiving only leftover funds after recurrent expenditures are covered. This practice, the group stated, has consistently disrupted the execution of multi-year infrastructure and social development programmes.
Between 2015 and 2024, government spending in Nigeria averaged only 13.1% of the country’s Gross Domestic Product (GDP), a figure significantly below the global average of 30% and the Sub-Saharan African (SSA) average of 21.2%.
The report further revealed that of the N54.99 trillion allocated for the 2025 budget, N27.96 trillion, or 50.8%, has been earmarked for recurrent spending, which includes debt servicing and non-debt recurrent expenditure. Meanwhile, capital expenditure, which is crucial for public investment and social infrastructure, received only 49.2% of the budget.
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“This chronic underinvestment limits the country’s ability to build human capital, develop infrastructure, and drive economic diversification,” the NESG stated.
Additionally, the group noted that Nigeria’s current public finance management framework is ineffective in ensuring that the government’s annual budget fulfils its economic stabilisation and balancing role. This has resulted in less-than-optimal conditions for economic returns and improvements in citizens’ welfare. The group emphasised that the effectiveness of resource mobilisation and allocation is more important than the sheer size of public expenditure.
In its analysis, the NESG acknowledged that the 2025 budget’s size is historically large. However, it noted that the capital expenditure has a slightly higher allocation than recurrent expenditure (non-debt). The budget prioritises infrastructure development, debt servicing, and increased allocations to statutory bodies, including newly established regional development commissions.
Despite these provisions, the group highlighted three persistent issues that have plagued Nigeria’s budget performance in the past decade: the efficiency of public expenditure, revenue optimisation, and the growing burden of debt servicing. These issues, the NESG argued, continue to hamper the country’s economic growth.
The group also expressed concern over Nigeria’s low per capita public spending. With a budget of N54.99 trillion (approximately US$36.7 billion) for a population of 230 million, Nigeria’s per capita allocation stands at just N239,087 (around US$159.4) annually. This figure is significantly lower than South Africa’s public spending of about US$1,957 per capita, and it is well below the average of US$800 per capita in peer countries.
In critical sectors such as health and education, budget allocations remain worryingly low. The federal government has allocated just N2.38 trillion (US$1.49 billion) to health services and less than N2.59 trillion (US$1.62 billion) to education for 2025. The NESG warned that such underfunding in these vital sectors could have long-term negative 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 NESG concluded.
