…Lament ‘Budget Of Loans And More Loans’
…Say High Debt Servicing Will Lead To More Suffering
…Insist Systemic Corruption Will Kill Budget Gains
LAGOS – Professor John Ebhomien, an economist and financial expert, has said that the 2025 federal budget of N47.9 trillion, though the highest in Naira terms, is the lowest in Dollar terms since 2020.
This, he stressed, has generated significant concerns by Nigerians since about N13 trillion of the budget will be financed through loans amid food inflation.
Prof. Ebhomien, a former World Bank/International Monetary Fund (IMF) expert, however, said it is pertinent to understand that one of the ways and means to finance the deficit budget is through loans.
Ebhomien, an All Progressives Congress (APC) chieftain in Lagos, stated: “The precarious state of the economy caused by past administrations has made it mandatory for the Federal Government to borrow to finance the 2025 budgets.
“The dwindling resources from other sources of funds such as oil, excise duties, etc, are not enough to meet ever pressing needs of the government at all levels.
“Obviously, my assessment of the President Bola Ahmed Tinubu’s government’s budget performance in more than one year is based on key performance indicators (KPIs) such as cash and liquidity, debt and solvency, revenue as well as variance and performance.
“A critical examination of the above indicators shows that the budget performance of the Federal Government for the past one year was grossly affected by dwindling sources of revenue, cost variance of projects, rising inflation, high foreign exchange rates, etc. So far, the budget performance of President Tinubu is on a good track.
“My advice to the government is to put in place appropriate mechanisms for prudent spending and accountability at all levels of governance.”
Dr Benneth Eze, senior lecturer and the 2023 deputy governorship candidate of the African Action Congress (AAC) in Lagos State, noted that out of the N47.9 trillion 2025 budget which President Tinubu presented to the National Assembly, his government intends to borrow ₦13.13 trillion to finance the budget deficit, while it also intends to spend N8.25 trillion to service the nation’s debt.
Eze, who teaches Management Science in one of the private universities, said: “The N8.25 trillion (17.49% of total expenditure) earmarked for debt servicing, tends to negatively impact the nation’s ability to fund growth-enhancing domestic investment.
“It is also important to state that the nominally high proposed expenditure is due to high rate of inflation and the depreciation of the Naira.
“I think that the most important issue is to ensure a high level of probity in the entire budget process. Measures to eliminate leakages, waste, corruption, weak procurement process, should be put in place.
“It is also important to address the lack of continuity in policies and project implementation.
Bishop Herbert Ekechukwu, also an economist, called Tinubu’s 2025 budget “a budget of loans and more loans.”
Ekechukwu stressed, “In presenting the budget, President Tinubu said it is a budget of restoration, securing peace and rebuilding prosperity.
“The proposed budget of N47,9 trillion is expected to be financed by borrowing to the tune of N7.83 trillion, N298,49 billion from privatisation proceeds and N1.05 trillion drawn on multilateral and bilateral loans to be secured for specific development projects
“Looking at the implications of the budget, the Nigerian debt burden will increase. High debt to GDP ratio will increase. Also, the cost of borrowing in the future will be high in 2025, while the country may not achieve higher economic growth.
“Looking at the budget, a significant fund is allocated for infrastructural development to the tune of about N 4.06 trillion.
“Based on past experience with endemic corruption level, I fear whether we will achieve any economic development.
“Mr. President talked about plans to achieve human capital development. There is no ingenious plan to do this, apart from rhetoric. We will wait to see real human capital development.
“The budget projects inflation rate down from 34,5% to 15% and exchange rate down from $1700 to $1500.
“However, these projections are subject to various uncertainties and risk factors, including fiscal and financial policy implementation as well as global and domestic conditions.”
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