Stakeholders Warn of Underperformance Risks in 2025 Budget

Economic stakeholders have expressed concerns that the 2025 national budget may fall short of its targets, citing structural deficiencies, revenue challenges, and implementation bottlenecks. The caution comes as the government finalizes the proposed spending plan, which aims to address critical issues such as infrastructure, security, and economic recovery.

During a recent budget review session, analysts and industry leaders pointed to unrealistic revenue projections as a primary factor that could derail the budget’s performance. Nigeria’s dependence on oil revenues, coupled with fluctuating global crude prices and declining production levels, poses a significant risk to meeting financial targets.

“The budget appears overly optimistic in its revenue assumptions, particularly in the face of persistent oil theft and production challenges,” said financial analyst Tunde Alabi. “Non-oil revenue streams, though growing, are still insufficient to offset the shortfall, making the funding gap a major concern.”

The 2025 budget framework also includes substantial borrowing to bridge the expected deficit, a strategy that has drawn criticism due to Nigeria’s rising debt profile. Stakeholders warn that the increasing cost of debt servicing could crowd out essential spending on social services and infrastructure, further limiting the budget’s impact.

In addition to funding challenges, implementation inefficiencies remain a longstanding issue. Analysts highlighted delays in project execution, corruption, and bureaucratic bottlenecks as barriers to achieving the desired outcomes. “Even when funds are available, the capacity to deploy resources effectively remains a major problem,” noted economist Grace Ifeanyi.

Stakeholders also questioned the budget’s alignment with Nigeria’s economic realities. While the government has prioritized infrastructure development, agriculture, and human capital, critics argue that the allocations may not adequately address pressing issues such as inflation, unemployment, and poverty.

To improve the budget’s prospects, stakeholders have called for a more conservative and realistic approach to revenue forecasting. They also emphasized the need for structural reforms to boost non-oil revenues through diversification, improved tax collection, and curbing leakages in public finance.

Furthermore, experts recommend enhancing public-private partnerships (PPPs) to leverage private sector investment in key sectors. By involving private entities in infrastructure and other capital-intensive projects, the government could reduce its financial burden while ensuring more efficient project execution.

Accountability and transparency in budget implementation were also highlighted as critical areas for improvement. Stakeholders urged the government to adopt stricter monitoring mechanisms and strengthen institutions to ensure that allocated funds are used effectively and for their intended purposes.

Despite the concerns, some analysts remain cautiously optimistic, noting that the budget could perform better with strategic adjustments and sustained political will. “The government has an opportunity to address these challenges head-on by adopting pragmatic policies and focusing on fiscal discipline,” said policy expert Musa Abdullahi.

As deliberations on the 2025 budget continue, stakeholders stress the importance of proactive measures to mitigate risks and ensure that the spending plan delivers tangible benefits to the economy and the Nigerian people. The government’s ability to address these concerns will be critical to restoring public confidence in the budgetary process and achieving its developmental goals.