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N54.9tn budget: FG, W’Bank at odds over funding strategy

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The World Bank has described Nigeria’s 2025 federal budget as overly ambitious, warning that the Federal Government may be forced to turn to the Central Bank of Nigeria’s Ways and Means facility to finance likely revenue shortfalls.

The Bank gave this warning on Monday during the public presentation of its latest Nigeria Development Update report titled ‘Building Momentum for Inclusive Growth’ in Abuja.

President Bola Tinubu signed the 2025 Appropriation Act into law, approving a record budget of N54.99tn, the highest in Nigeria’s history.

The budget was raised from the initial proposal of N49.7tn submitted to the National Assembly.

The fiscal plan makes provisions for N13.64tn in recurrent expenditure, N23.96tn for capital projects, N14.32tn for debt servicing, and N3.65tn for statutory transfers, while projecting a deficit of N13.08tn, to be financed through domestic and external borrowing.

The budget assumptions include a crude oil benchmark of $75 per barrel, oil production at 2.06 million barrels per day, an average exchange rate of N1,400/$, and an inflation target of 15 per cent.

Speaking at the event, the World Bank’s Lead Economist for Nigeria, Mr Alex Sienaert, said that despite strong revenue gains recorded in 2024, Nigeria’s 2025 budget assumptions remain optimistic and may prove difficult to meet.

He said, “It’s a very ambitious budget. Even with the very positive revenue sort of tailwind that we have… even considering that, it looks like it’s going to be pretty hard to meet some of the ambitious revenue targets that are in there.”

According to him, key assumptions such as average daily crude oil production of 2.1 million barrels per day and a benchmark oil price of $75 per barrel are unlikely to hold, noting that current production figures are closer to 1.6 million barrels per day.

He also cited uncertainty over how much revenue would flow from the removal of the petrol subsidy and the planned windfall tax on foreign exchange gains, saying these could weaken the Federal Government’s revenue position.

“This is important because if it does turn out that the revenue targets are not met, then that could mean that the financing requirements are more than budgeted.

And if the financing requirements exceed what’s budgeted, then that’s either going to create arrears pressures… or it could renew risks of recourse to things like deficit monetisation under large-scale Ways and Means,” he said.

Sienaert warned that although Nigerian authorities had pledged not to resort to the CBN’s overdraft facility, doing so again could derail the country’s fragile macroeconomic recovery.

“The authorities have been very clear that they will by no means be going back to large-scale use of Ways and Means, but were that to happen, it would be just extremely disruptive to the whole rebuilding of confidence in fiscal sustainability and in the naira ultimately,” he noted.

On broader fiscal matters, the World Bank called on the Federal Government to eliminate the electricity subsidy, which it described as a “wasteful, regressive subsidy.”

Sienaert said key fiscal reforms such as the removal of the petrol subsidy and the adoption of a market-reflective exchange rate had helped improve the government’s fiscal position, but further reforms were needed.

“There’s still a range of fiscal policy and fiscal management issues where more can be done to safeguard the gains that have already been achieved… just to name, there is still one kind of wasteful regressive subsidy, which is the electricity subsidy.

So work to address that,” he said.He also advocated for improved oil revenue transparency and a reduction in the cost of governance, saying efforts to increase non-oil revenue must continue.

Sienaert noted that although the Nigerian National Petroleum Company Limited began applying official exchange rates for fiscal transactions in October 2023, only half of the revenue gains from the subsidy removal had been remitted to the Federation Account by January 2025.

“It’s just going to be important in the coming months to keep tracking this, and ultimately that the full revenue gains from the difficult job of eliminating the subsidy do flow to the Federation so that that can support a continued healthy fiscal picture and, in turn, spending on development priorities,” he said.

On inflation, the World Bank economist said monetary policy reforms had helped reduce inflationary pressures but noted that consumer prices remained high.

“We do need to acknowledge that price pressures remain elevated,” he said.

“The battle against inflation continues, and to extend the military analogy a little bit, there’s a kind of fog of war… quite dense just at the moment.”

He added that recent changes to the Consumer Price Index by the National Bureau of Statistics had made it difficult to determine the current trend in inflation, noting, however, that continued coordination between fiscal and monetary authorities would be critical to restoring confidence.

The World Bank further urged the government to ramp up implementation of its targeted cash transfer programme aimed at cushioning the cost of reforms on poor households.

The programme currently offers N25,000 monthly for three months to 15 million recipients.

“The implementation has just been quite slow. So only about a third of those recipients have received transfers so far. The good news is that this is being scaled up… and just important that that effort really continues so that as many people as possible get help,” Sienaert said.

Looking ahead, he called for a new growth strategy based on a “private-led, public-facilitated” model.

The World Bank also stressed the need to reduce costs of governance, including cutting “wasteful expenditures that are not essential, such as purchase of vehicles, external training, etc.” and reducing “the cost of collection of GOEs (FIRS, NCS, NMDPRA, NUPRC, etc.).

”He emphasised the need for increased investment in education and health, noting that Nigeria’s combined spending in these sectors remained among the lowest globally.

“In 2022, Nigeria was only spending 1.2 per cent of GDP on education and 1.8 per cent on health, or $23 per Nigerian per year on education, $15 per Nigerian per year on health,” he said.

He said private sector growth must also be supported by improving the competitive landscape and reviewing trade policies that restrict access to essential production inputs.

“Competition is like the sort of secret sauce that drives innovation and economic transformation.

And in Nigeria, there’s some evidence… that actually there are elements of competition policy, and there are conditions that are needed for good competition that actually even compared to some of Nigeria’s immediate peers… the Nigerian competitive landscape lags some of those,” he said.

The Bank believes that following through with these reforms will position Nigeria to achieve its goal of becoming a $1tn economy by 2030.

Speaking at the event, the Minister of Budget and Economic Planning, Senator Abubakar Bagudu, has faulted the World Bank’s claim that Nigeria’s 2025 budget is overly ambitious, insisting that the projections are modest and aligned with the country’s growth capacity.

While the World Bank’s Lead Economist for Nigeria, Mr Alex Sienaert, had earlier described the 2025 fiscal projections as “very ambitious” and warned of possible recourse to deficit monetisation, Bagudu took a different view.

“Is the projection of the 2025 budget ambitious? No, they are not,” the minister said.

“They are all modest. Because even in the presentation, two things were said — some oil prices are about $60, but the average for Nigeria is $73 because of our premium grades.

”On crude oil production, which the World Bank said was likely overstated in the budget at 2.1 million barrels per day, Bagudu insisted Nigeria has both the record and capacity to exceed that.

“We have produced more than 2.3 million barrels a day,” he said.

“And the Minister of Petroleum always tells us that the technical and fiscal capacity — that means the ability to produce in terms of acreage, in terms of technology — is higher than that.

So, we are right as a team to say that, look, we are going to task everyone. ”He argued that budgets should be aspirational and not constrained by present challenges.

aspirational and not constrained by present challenges.

Related News CBN policies may lower inflation to 22.1% – W’Bank Economic reforms boosted govt revenue to N31tn – World Bank Nigeria posts fastest GDP growth in decade — World Bank

“A budget should not be a reflection of our indulgences. It should be a reflection of our potential. Mr President made it clear — all of us are going to be challenged to give our best,” he said.

Bagudu also pointed to improvements in Nigeria’s fiscal performance, citing a rise in revenue-to-GDP and expenditure-to-GDP ratios. He said these indicators are critical to delivering inclusive growth.

“Revenue-to-GDP ratio has gone up, expenditure-to-GDP ratio has gone up, which is critical to delivering inclusiveness,” he said.

“Especially the fact that in the increased revenue to sub-nationals… there is even a reduction in debt for the sub-nationals, which enhances their fiscal space.

”Highlighting President Bola Tinubu’s broader economic agenda, the minister revealed that a national initiative focused on mapping economic opportunities in Nigeria’s 8,809 political wards would soon be launched.

“What we have been dealing with is a programme to ensure that all three tiers of government are working together to map economic opportunities in all the 8,809 wards,” he said.

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Nigeria: There’s Fire on the Mountain, and no one is a runnin’

It is sad that foreign armed groups are able to overrun the nations’ security apparatus not minding the mind bugling amount of funds voted every year in the nation’s budget on security.

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By John Segun Odeyemi

Image credit: Burnt Community in Benue

Until now, I have refrained from writing commentaries about the political landscape of our country, Nigeria.

I have become disenchanted with the downward spiral of the absurdities that have become common place within the political space.

Within the last few days, I have read several articles on the killings in Plateau, Nasarawa and Benue States, and I am convinced to add my voice to the outcry of government’s inability to act proactively in securing the safety of Nigerians from marauding and murdering Fulani insurgents, Boko Haram terrorists and the incessant and now common place kidnapping for ransom.

Anywhere in the world, the first duty of any government is to secure the safety of its citizens in and outside of the country.

It is clear that the government of President Ahmed Bola Tinubu is either incapable or unwilling to tackle the continuous decimation and subjugation of our people.

In most other climes that claim democratic principles, those in leadership should have resigned from office.

Not in Nigeria! Here we glorify ineffectiveness and inefficiencies.

In the epic 2008 song titled, “There is Fire on the Mountain,” by the Nigerian musician who goes by the name Asa, she makes the claim even though this fire is raging, surprisingly, no one is running.

I find two corollaries, one in an old English idiom, and the other in traditional Yoruba oral tradition; for the English, “The proverbial ostrich that buries its head in the sand.

And the Yoruba wisdom, “No one lights a torch and leaves it burning around a thatched roof.”

In both instances, the culprit is inertia or the lack of desire to act in preventing a disaster.

Either of which does not describe, even at the minimal level, a people willing to act fundamentally from a place of common sense!

Unfortunately, when I see the shenanigans, politicians have reduced my country to, I can only conclude we have politicians who have knowingly set a fire to the country.

And we have a citizen who see the fire and refuse to run.Human life is sacred and each individual’s life should be protected.

Sadly, the entire nation seems inured to a culture of bloodletting, savagery and the disposal of human life.

Our social media space is diffused with gory videos and pictures of unthinkable scenes of inhumane accounts of man’s inhumanity and cruelty to other humans.

Anywhere in the world, the first duty of any government is to secure the safety of its citizens in and outside of the country.

More specifically, of brigandry to defenseless communities.

A situation where aggressors over run entire communities, displace the communities and inhabit their homes without re-adjudication or lawful intervention by constituted authority and, or state intervention.

I continue to hear of “insecurity” in the nation when in reality, what we have is the invasion of our sovereignty as a nation.

It is sad that foreign armed groups are able to overrun the nations’ security apparatus not minding the mind bugling amount of funds voted every year in the nation’s budget on security.

One is forced to question the usefulness and functionality of government sponsored and funded state security agencies.

One cannot but wonder why insurgents are better equipped than the nation’s army in arms and intelligence gathering?

Who are the invested players who supply them with arms and ammunition?

How can bandits become so powerful as to brazenly over run our country’s army encampment, capture Nigerian soldiers, take their armored cars and weapons and put all of this on social media?

There are multiple narratives circulating and making the rounds especially on social media.

Unfortunately, there is no way of verifying the authenticity of some of these claims.

Some shadowy entities trace the incessant bloody and extremely violent attacks on a bid, either for the Islamization of the country or Jihad aimed at a land grab in favor of all shades of Fulanis from the Sahel.

Some even make the claim that it is both issues morphed into one.

I find some plausibility at least in the Fulani bid to find a home in Nigeria.

The current governor of Borno state made that claim on national TV. When asked if the Fulanis coming from outside Nigeria are Nigerians.

He blatantly said “Yes.” Immediately, when I encounter political impropriety and lack of diplomacy at this level, my mind goes into a default.

I try to find a matching partner for buffoonery; in this instance, I thought his less- cellency should be sent to Donald Trump’s school of diplomacy and should not be allowed to return without a doctorate.

For far too long, we have behaved like the ostrich, unable to confront, nationally, the real issues we need to confront; our federalism vis-à-vis regionalism, state policing, our current constitution, our so called “democracy”, and the relationship between the North and the rest of the country.

I believe there is enough land and space in the North to accommodate kith and kin from other climes to settle and graze their cattle up north.

Ranching versus grazing and any other animal husbandry is fine as long as your business does not disrupt mine.

But we all know that grazing is intentionally done to destroy people’s hard work on their farms.

We all know it, but we are looking the other way and mumbling the fool’s mantra, “It is well!”

It is not well, and there is no way it will be well, if some psychotic, marauding murderers, rapists, and demented drug addicts are allowed to kill innocent citizens of our country.

We can no longer be silent if we are human and sane.

If the corridors of power are playing politics with our fellow citizens’ property, security and lives, we have a moral obligation to rise up in holy and righteous anger to stump on evil.

Just last week, we witnessed in the United States, how an entire country came out en-masse to protest what was perceived as oligarchy, an affront on the idea of American democracy, which was tagged “No King.”

Why are we unable to hold our politicians accountable? Why is it that it seems we do not understand that they work for us (even though they steal from us all the time!)

If we do not force a change by our action as citizens, knowing that our so-called politicians are only interested in their own welfare; we must then ask ourselves the mother of all questions… pardon me to borrow from Asa again; “…

One day, the river will overflow and there will be nowhere for us to go.

And we will run, run, wishing we had put out the fire.”

When all has been said, we need to all agree as Nigerians, that these killings are too much! If you do not feel this empathy, then know you are a part of the killing spree.

Those who nurture this theater of war are not interested in building a nation or having a viable ecumenical union among religions in our country. it is all about disorder so they can continue to steal and enrich themselves; “… the more you see, the less you understand, Abracadabra!” If we keep quiet, they continue to eat away at the innards of our country and the rest of us, shall be unaware of what our infestation is coming from?

From within, they will polarize our peoples, dislocate the unity of our communities.

From our jaded communities, we help spew hate and hate and more hate. This in turn corrodes our ability to build a unified front.

Our politicians place their lighted touch under a thatched roof and go to bed on their watch.

When the fire starts, where are we going to run? We can douse the fire now if we imagine the conflagration that a burning Nigeria will look like.

John Segun Odeyemi, is a Catholic Priest and assistant professor of Systematic theology at the Institute for Black Catholic Studies, Xavier University of Louisiana.

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Crime

Kaduna Police Command reveals identity of man in Tinubu’s recent near attack (Video)

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The Kaduna State Police Command has revealed the identity of the man who caused panic after charging towards President Bola Tinubu during his visit to the state.

According to the police, the suspect has been identified as Umar Mohammed, a resident of Anguwan Muazu in Kaduna.

The incident happened during the commissioning of a 300-bed specialist hospital in Millennium City.

As President Tinubu was addressing the audience, Mohammed suddenly broke through the crowd and rushed toward him, triggering a swift response from security operatives.

The moment left Tinubu visibly shocked, as seen in a widely shared video showing his startled reaction and the confusion among his security team.

Police later disclosed that the man has a mental health condition he has lived with since birth.

They described his actions as unplanned and driven by excitement, adding that he was unarmed and posed no real threat after being restrained.

Despite the scare, the event continued as planned.

Governor Uba Sani led the inauguration of the hospital, which is expected to boost healthcare access in Kaduna.

https://twitter.com/drizzle_new/status/1935781337690182018?s=19

Video credit: TVC (Twitter)

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Hardship: Govs Agree to Dismantle Illegal Road Blocks, Multiple Taxes

The communique was signed by NGF Chairman and Governor of Kwara State, AbdulRahman AbdulRazaq.

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Governors of the 36 states of the federation have agreed to dismantle illegal road blocks and multiple taxes across the country.

They made the resolution after a meeting of the Nigeria Governors’ Forum (NGF) in Abuja, which ended early Thursday.

The governor of Lagos State, Babajide Sanwo-Olu, who read the communique at the end of the meeting, said that the governors resolved to dismantle illegal road blocks and multiple taxes, which they said contributed to food inflation in the country.

The communique was signed by NGF Chairman and Governor of Kwara State, AbdulRahman AbdulRazaq.

(ThisDay)

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