President Bola Tinubu on Friday signed into law the much-anticipated N54.99tn ($36.6bn) 2025 Appropriation Bill in a quiet but significant ceremony at the State House in Abuja.
Surrounded by principal officers of the National Assembly and top government officials, Tinubu’s signature formalized a financial plan designed to tackle the nation’s most pressing challenges while laying the groundwork for long-term economic stability and growth.
This historic budget didn’t come without adjustments. Initially proposed at N49.7tn, the National Assembly approved an upward review to N54.99tn after additional revenue projections from key agencies like the Federal Inland Revenue Service (FIRS) and the Nigeria Customs Service.
At the heart of this budget lies a clear agenda: to address security, infrastructure, education, and health. Notably, $200m has been earmarked to mitigate the impact of recent reductions in U.S. health aid. This is a move that signals the government’s commitment to sustaining crucial public health services despite external funding cuts.
But beyond these immediate priorities, the 2025 budget also paints a picture of hope through ambitious economic assumptions. It projects crude oil production at 2.06 million barrels per day, pegged to a benchmark price of $75 per barrel. The government also aims to bring down inflation from a staggering 34.8% to 15% by the end of the year.
Additionally, the budget projects an exchange rate of N1,500 to the U.S. dollar, setting expectations for currency stabilization amidst ongoing economic reforms.
A significant pillar of the fiscal strategy is tax reform. This is a measure Tinubu believes is crucial for enhancing revenue generation and ensuring economic stability. One of the standout proposals includes increasing the value-added tax (VAT) to 12.5% by 2026, though essential goods like food and medicine will remain exempt to protect vulnerable households.
But perhaps the most controversial element is the plan to reallocate VAT revenues in favor of states generating more. While some see this as a reward for economic productivity, others fear it could widen existing regional disparities, sparking ongoing debates across political and economic spheres.
The scale of the 2025 Appropriation Act is unprecedented. This represents a near 100% increase from the N27.5tn budget of 2024.
Source: Ripples
