Nigeria’s Finance Minister, Wale Edun, has announced that the country’s 2025 budget will have a record deficit of ₦13 trillion, which will be funded through borrowing.
This disclosure was made on Monday after a meeting of the Federal Executive Council (FEC) at the Presidential Villa in Abuja.
According to the Minister, Nigeria’s projected total revenue for the year 2025 stands at ₦34.8 trillion, while the expenditure is estimated at ₦47.9 trillion.
This expenditure figure represents a significant increase of 36.8 percent compared to the 2024 budget.
The deficit of ₦13.1 trillion is about 3.89 percent of the country’s Gross Domestic Product (GDP), which is considered high but within global limits for many developing economies.
Edun emphasized that the deficit will be financed by borrowing. He explained that borrowing is necessary to fund key projects that will stimulate growth and create jobs.
The Minister also underscored that the 2025 budget was designed with a focus on the achievements made by President Bola Tinubu’s administration in the last 18 months.
“This budget is built on progress made under President Tinubu’s leadership,” Edun said. “We are working hard to ensure fiscal sustainability, balancing revenue, expenditure, and borrowing.”
Focus on Private Sector Investment and Economic Growth
One of the key themes of the budget is to attract private sector investments, which are seen as essential to the country’s long-term growth.
Edun explained that the Nigerian government is focused on creating an environment that encourages investment in critical sectors such as infrastructure, agriculture, and manufacturing.
“Private sector-led economies like ours rely heavily on investors to drive economic growth,” he stated. “By attracting investments, we aim to increase productivity, create jobs, and improve living standards.”
The minister also pointed out that the Nigerian economy has made positive strides in the past year. He highlighted the influx of foreign investments as evidence of the country’s improving economic climate.
“For example, just recently Shell announced a $5 billion investment, while Total also revealed plans for a multi-billion-dollar investment,” Edun said. “This is a clear indication that investors have confidence in the Nigerian economy.”
Key Budget Areas: Infrastructure, Oil, and Energy
The 2025 budget has been structured to focus on critical sectors such as infrastructure, oil, and energy. Edun pointed out that the administration is prioritizing infrastructure development to drive economic growth.
The government has also made significant strides in the oil sector. According to Edun, Nigeria’s domestic refining capacity has improved, with the country now able to produce its own petrol for the first time in 25 years.
This achievement is seen as a major milestone, as it not only reduces the country’s reliance on imports but also opens up opportunities for the production of raw materials used in industries such as pharmaceuticals, construction, and textiles.
Edun also mentioned ongoing efforts to improve the pricing of electricity and the foreign exchange market, both of which are key components of the country’s macroeconomic stability.
“By implementing market-driven pricing for petroleum products and foreign exchange, we are creating a more stable and predictable environment for businesses,” he said.
Despite the positive outlook, the 2025 budget is not without its challenges. The projected deficit of ₦13 trillion raises concerns about the sustainability of Nigeria’s fiscal policies, particularly in light of the country’s rising debt levels.
Edun acknowledged the need for caution in borrowing but stressed that the government is focused on ensuring that the borrowed funds are used wisely to fund growth-enhancing projects.
“We are committed to fiscal discipline,” he said. “Our goal is to create a balanced environment that supports both public investment and private sector growth.”
The Minister also noted that while many advanced economies are facing similar challenges, Nigeria must remain committed to its economic reforms.
“Countries like ours are not alone in facing these fiscal challenges,” he added. “Even European countries are struggling to achieve fiscal sustainability, but Nigeria is making real progress.”
