Nigeria’s Budget Overlap, Sign Of Effective Fiscal Transition — Tanimu – Independent Newspaper Nigeria

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Nigeria’s ongoing implemen­tation of three separate federal budgets—the 2024 main Appro­priation Act, the 2024 Supple­mentary Budget, and the 2025 Appropriation Act—is not a sign of fiscal confusion but an example of institutional reform, according to Dr. Tanimu Yakubu, Director-General of the Budget Office of the Federation.

Speaking on the seeming overlap, Yakubu said the situa­tion is not only legal but neces­sary for effective fiscal transition.

He said, “The 2025 budget is being implemented in earnest, while residuals from the 2024 and supplementary budgets are lawfully closed out and disbursed. This is part of building a more ag­ile and accountable public finance framework.”

 He noted that although the country is operating what appears to be three budgets simultaneous­ly, the arrangement is supported by existing legal frameworks that provide for fiscal continuity, par­ticularly for capital projects and multi-year commitments.

The 2024 Appropriation Act, signed into law in January 2024, remains valid until December 31, 2024. It continues to serve as the le­gal basis for Federal Government spending, especially for projects and contractual obligations still active within the fiscal year.

In addition, the 2024 Supple­mentary Budget—enacted mid-year—was introduced to address emerging fiscal pressures such as heightened security needs, hu­manitarian emergencies, sectoral shocks, and revenue shifts not an­ticipated in the original budget.

Yakubu explained that the supplementary budget was not a duplicate of the main budget, but rather an extension to accommo­date new realities.

“The supplementary budget doesn’t duplicate the main bud­get,” he said. “It extends and adjusts it, making room for new realities without breaking the fiscal continuum.”

To further institutionalise budget discipline, the Federal Government had also passed and signed the 2025 Appropria­tion Act before the end of 2024, in line with efforts to sustain the January-to-December budget cy­cle. The early passage of the 2025 budget, according to Yakubu, reflects a maturing fiscal process aimed at enhancing predictability and execution.

However, the Budget Office ac­knowledges that the transition has not been entirely seamless. Many capital projects initiated in 2024 are still ongoing due to procurement delays, disbursement lags, or the multi-year nature of the projects. Donor-funded and infrastructure programmes, which often come with their legal timelines, have also contributed to the overlap.

In such cases, parallel account­ing systems are maintained to en­sure that funds committed under the 2024 budget are not lost or dis­rupted by the commencement of the 2025 budget.

Yakubu emphasised that Ni­geria is not alone in experiencing this kind of budget overlap. Other emerging economies—including India, Indonesia, and Kenya— face similar fiscal dynamics as they reform and modernise their public finance systems.

“This is not an anomaly,” he said. “It is how evolving public finance systems operate—espe­cially where reforms are ongoing, and absorptive capacity is still be­ing strengthened.”

He added that international best practices now encourage flexible, performance-based bud­geting frameworks rather than rigid, linear models.

The overlapping budgets are supported by legal instruments such as the Finance Act, specific clauses within the Appropriation Acts, and Central Bank of Nigeria (CBN) guidelines. These laws al­low for: The rollover of unspent but committed capital funds across fiscal years; bridging cash flows for early implementation of new budgets, and parallel ac­counting structures for large or donor-supported projects.

“These provisions ensure that no funds are arbitrarily disbursed and that all spending aligns with statutory and policy frameworks,” Yakubu said.

The real challenge, according to him, lies not in the presence of multiple budgets, but in ensuring that they are executed in a coordi­nated, transparent, and account­able manner.

Fragmentation can occur, he warned, if Ministries, Depart­ments, and Agencies (MDAs) fail to effectively align their opera­tions. To address this, the Budget Office is strengthening oversight mechanisms, intensifying train­ing for MDAs, and collaborating with the Office of the Accoun­tant-General and donor agencies to create systems that can track projects across fiscal years.

“We are building toward a system where the transition from one budget to another is smoother, faster, and more ac­countable,” Yakubu said. “The presence of multiple active bud­get instruments is a temporary but necessary cost of achieving that vision.”