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•Nigeria a big pot of economic quagmire –Economists
By Chinwendu Obienyi
The Federal Government’s proposed 2025 budget has ignited widespread outrage and disbelief among Nigerians, policy analysts and economists, with many questioning its feasibility and the country’s fiscal direction.
Describing Nigeria’s economic challenges, economists have painted a grim picture, referring to the nation as a “big pot economic quagmire,” highlighting the weight of rising debt, inflation, unemployment and stagnation.
The federal government, at the weekend, presented a budget proposal of N47.9 trillion for 2025, featuring key projections such as a crude oil price benchmark of $75 per barrel, an exchange rate of N1,400/$1, and GDP growth of 4.6%. While these figures project a sense of optimism, many Nigerians are struggling under the burden of soaring prices and worsening economic conditions.
Chief Executive Officer of Financial Derivatives Limited, Bismarck Rewane, challenged the oil price benchmark, deeming it unrealistic given global economic uncertainties. Speaking on Channels Television, Rewane said, “The benchmark should actually be closer to $65 per barrel to allow for fiscal flexibility. Setting it at $75 per barrel will heavily pressure the economy, especially with uncertainties like the emergence of President-Elect Donald Trump in the U.S.”
Additionally, the Federal Government’s plan to borrow N9.22 trillion to fund the budget has raised concerns about Nigeria’s ballooning debt and unsustainable debt servicing costs.
Boniface Okezie, National Coordinator of the Progressive Shareholders Association of Nigeria, highlighted the challenges of managing borrowed funds. “Borrowing, which has become Nigeria’s slogan over the years, isn’t the real issue. The problem lies in how the N9.22 trillion will be utilized,” he noted.
He criticized the revenue projections as overly ambitious.
“We are grappling with issues like tax collection inefficiencies, oil theft, and declining foreign investments. Meanwhile, critical sectors like education, healthcare, and infrastructure remain underfunded, while significant funds are allocated to recurrent expenditures and non-productive areas,” Okezie added.
Adetilewa Adebajo, the Chief Executive Officer of CFG Advisory, questioned the consistency of past budgets and the basis for the 2025 projections. “The first question we must ask is: what has been the performance of the 2024 budget? Several budgets are running simultaneously, yet the impact of reforms remains unclear. For example, the 2024 budget framework projected N700/$1 as the exchange rate, but it’s already above N1,500/$1. Deficits were projected at N10 trillion, but with the supplementary budget, this is closer to N18 trillion,” Adebajo said.
He added, “With these challenges, we must ask: what revenue sources are in place to finance the 2025 budget? Historically, we’ve only met 65-70% of revenue targets. If you ask me, we’re in an economic quagmire.”
Despite previous attempts to diversify revenue sources, Nigeria remains heavily dependent on oil, leaving the economy vulnerable to price shocks. A significant portion of government revenue is consumed by debt repayments, limiting funds for development.
The growing discontent highlights the urgent need for systemic reforms to address inefficiencies, improve revenue generation, and prioritize the welfare of citizens.
Without decisive action, the fiscal and economic challenges may deepen, further straining the livelihoods of millions of Nigerians.
