April 28, 2025
Despite notable expansion in overall spending compared to previous years the Nigerian Economic Summit Group, NESG, has described the 2025 federal budget as grossly inadequate to meet Nigeria’s critical social and infrastructure demands.
NESG, in its latest report, “2025 FGN Budget Analysis: Can The Budget Deliver a Major Economic Boost”, it observed that public investment in Nigeria continues to be treated as a “residual budget item,” receiving only leftover funds after recurrent expenditures are covered.
According to the Group the relegation of public investment has consistently disrupted the execution of multi-year infrastructure and social development programs.
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Though there is a relative increase in capital expenditure allocations for 2025 compared to prior years, the NESG emphasized that it is still insufficient compared to Nigeria’s vast infrastructure gap.
The NESG report, while federal government earmarked N27.96 trillion, representing 50.8% of the N54.99 trillion 2025 budget for recurrent spending, which includes debt servicing and non-debt recurrent expenditure, capital expenditure, which covers critical public investments and social infrastructure, received 49.2% of the budget.
Though NESG described the capital expenditure share in the 2025 budget as “commendable” compared to historical trends, it however, stressed that the absolute figures remain too small relative to the country’s wide infrastructure deficit.
The group stated that, “There is a pressing need to further increase capital spending share and absolute size to effectively bridge Nigeria’s current infrastructure gap.”
The statement also raised concerns over Nigeria’s low per capita public spending, especially when compared to peer economies.
With a 2025 budget of N54.99 trillion (approximately US$36.7 billion) and a population estimated at 230 million, the per capita allocation stands at just N239,087 (around US$159.4) annually.
This figure compared to South Africa’s public spending of about US$1,957 per capita and even falls significantly below the average US$800 per resident among other peer countries.
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The budget allocations remain worryingly low in critical sectors like health and education, The federal government in the 2025 budget, allocated only N2.38 trillion (US$1.49 billion) to health services and less than N2.59 trillion (US$1.62 billion) to education services.
The group warned that such gross underfunding in vital sectors could have long-term implications on Nigeria’s economic competitiveness, human capital development and poverty reduction drive.
Without significant increases in capital and social sector investments, Nigeria faces enormous challenges in closing its infrastructure gap and investing in its growing population, that could lead to slower economic growth, worsening poverty levels.
