The Nigerian Economic Summit Group (NESG) has flagged the 2025 federal budget as grossly inadequate to meet Nigeria’s critical social and infrastructure demands, despite a notable expansion in overall spending compared to previous years.
In its latest report titled “2025 FGN Budget Analysis: Can The Budget Deliver a Major Economic Boost”, the NESG observed that public investment in Nigeria continues to be treated as a “residual budget item,” receiving only leftover funds after recurrent expenditures are covered.
This, the Group noted, has consistently disrupted the execution of multi-year infrastructure and social development programs.
While there is a marginal improvement in capital expenditure allocations for 2025 compared to prior years, the NESG emphasized that it is still far from sufficient to bridge Nigeria’s vast infrastructure gap.
According to the report, the 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. Meanwhile, capital expenditure, which covers critical public investments and social infrastructure, received 49.2% of the budget.
Concerns over low investment in human capital
The NESG described the capital expenditure share as “commendable” compared to historical trends but stressed that the absolute figures remain too small relative to the country’s infrastructure deficit.
“There is a pressing need to further increase capital spending share and absolute size to effectively bridge Nigeria’s current infrastructure gap,” the NESG stated.
The Group 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 pales in comparison 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.
In critical sectors like health and education, budget allocations remain worryingly low. The federal government 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 for 2025.
The NESG warned that such underfunding in vital sectors could have long-term adverse effects on Nigeria’s economic competitiveness, human capital development, and poverty reduction efforts.
“These figures indicate that Nigeria’s budgetary provisions are grossly inadequate to address pressing social and infrastructure needs,” the Group noted.
Why this matters:
Nigeria faces enormous challenges in closing its infrastructure gap and investing in its growing population.
Without significant increases in capital and social sector investments, the country risks slower economic growth, worsening poverty levels, and a further decline in global competitiveness.
