By Kenechukwu Aguolu
President Bola Ahmed Tinubu GCFR, presented the Proposed 2025 Budget of Restoration, titled “Securing Peace, Rebuilding Prosperity,” to a joint session of the National Assembly on Wednesday, December 18, 2024. as required by the Nigerian Constitution. As expected. there have been divergent opinions about the appropriation bill with many referring to it as overambitious. While the budget is achievable, the projected reduction in Inflation is quite ambitious and may not be realized. More emphasis should have been placed on economic diversification.
The objective of reducing inflation to 15% which is a 59% decrease in a single year is particularly challenging. The increase in the value of the Naira, increased food production, and proper monetary/fiscal policies will surely drop inflation. However, achieving such a steep decline will not be feasible unless the value of the naira rises significantly; beyond what was projected in the appropriation bill.
Apart from agriculture, other sectors like tourism and mining can drive economic growth and resilience. Developing the Mining sector offers significant revenue-generation opportunities and will also lead to the establishment of more industries in Nigeria in a bid to take advantage of nearness to raw materials. The United Arab Emirates, France, Spain, etc, make massive revenue from tourism. Therefore, the Government should have demonstrated a greater economic diversification drive in the budget. Insecurity has hindered the development of mining and tourism in Nigeria.
Stabilizing the exchange rate at N1,500/US$ will require amongst other things; increased foreign exchange inflows through foreign portfolio/direct investments,
improved balance of trade, increased domestic oil production and refining capacity. Policies aimed at boosting exports and reducing dependency on imports are crucial for achieving currency stability and strengthening the naira.
Addressing insecurity remains fundamental to achieving the budget’s objectives. Insecurity continues to undermine agricultural productivity, deter investment, and disrupt infrastructure projects. A peaceful and stable environment is essential for economic growth and the creation of opportunities for citizens. The administration’s allocation of N4.91 trillion to defense and security underscores its acknowledgment of this challenge. However, addressing insecurity will require a comprehensive approach that combines military interventions with community engagement and socio-economic initiatives.
The 2025 Appropriation Bill, which has scaled second reading at the National Assembly, outlines an ambitious vision for Nigeria’s development. Critical to its success are inflation reduction, economic diversification, exchange rate stability, and improved security. The Government may wish to revisit the inflation projection and economic diversification drive. The National Assembly is expected to make adjustments to the bill during its review before passing it.
