President Bola Ahmed Tinubu has officially signed the N54.99 trillion 2025 Appropriation Bill into law during a brief ceremony at the State House in Abuja. The bill, which had been approved by both chambers of the National Assembly on February 13, was increased from the initial N49.7 trillion proposed by the president.
The 2025 Appropriation Act marks a striking 99.96% rise from the previous year’s N27.5 trillion budget. The key breakdown of the new budget is as follows:
- Total Expenditure: ₦54.99 trillion
- Statutory Transfers: ₦3.65 trillion
- Recurrent (Non-Debt) Expenditure: ₦13.64 trillion
- Capital Expenditure: ₦23.96 trillion
- Debt Servicing: ₦14.32 trillion
- Deficit-to-GDP Ratio: 1.52%
This considerable increase reflects expectations of higher revenues, particularly from agencies like the Federal Inland Revenue Service (FIRS) and the Nigeria Customs Service.
The 2025 budget is focused on critical sectors including security, infrastructure, education, and healthcare. Notably, it allocates $200 million to counterbalance the recent reductions in U.S. health aid.
Key economic assumptions for the budget include a crude oil production target of 2.06 million barrels per day and a price benchmark of $75 per barrel. The government also projects an exchange rate of ₦1,500 to the U.S. dollar, with the goal of reducing inflation from the current 34.8% to 15% by the end of the year.
A key aspect of the fiscal strategy is a series of tax reforms aimed at boosting revenue and ensuring economic stability. One major reform includes raising the value-added tax (VAT) to 12.5% by 2026, with exemptions for essential goods like food and medicine to lessen the impact on households. Additionally, the proposed changes suggest reallocating VAT revenues to states based on their contributions, a move that has ignited debates over its potential effects on regional economic inequality.
