Debt Servicing To Consume ₦‎15.81trillion In 2025 Budget — Tinubu Says

President Bola Tinubu on Wednesday presented Nigeria's proposed budget for 2025, amounting to ₦47.9 trillion. A significant portion of this budget, precisely ₦15.81 trillion, is earmarked for debt servicing. This allocation has sparked widespread discussion and debate across various sectors of Nigerian society.

The proposed budget aims to address several critical economic challenges facing Nigeria. President Tinubu highlighted that the government is targeting ₦34.82 trillion in revenue to fund the budget, which leaves a projected deficit of ₦13.08 trillion.

This deficit represents approximately 3.89% of the country's GDP. The budget also prioritizes key sectors such as defense and security, which are allocated ₦4.06 trillion, health with ₦2.4 trillion, and education receiving ₦3.5 trillion.

The allocation of ₦15.81 trillion for debt servicing shows the significant financial burden that debt repayment places on Nigeria's economy. As noted in the discussions surrounding the budget, this figure represents a substantial commitment, raising concerns about the sustainability of such high levels of debt servicing.

Critics argue that the focus on debt repayment detracts from potential investments in infrastructure and other critical areas that could stimulate economic growth.

President Tinubu's budget proposal includes ambitious economic targets. Inflation, currently at 34.6%, is projected to decrease to 15%. Additionally, the exchange rate is expected to improve from ₦1,700 to ₦1,500 per US dollar. These projections are part of a broader strategy to stabilize the economy and enhance Nigeria's fiscal health.

The budget proposal has elicited a range of reactions from the public and political commentators. Some individuals commend the administration's efforts to reduce the proportion of the budget dedicated to debt servicing, suggesting that it allows more resources to be directed towards essential sectors of the economy.

As one commentator noted, "We went from using 95% of our annual budget for debt servicing, to sparingly dumbing just less than 30% of our budget on debt servicing in just 18 months of his reign."

However, others express skepticism about the effectiveness of these measures. Concerns are raised about the continued reliance on borrowing and the lack of visible improvements in infrastructure and public services. One critic remarked, "The rich do the borrowing and the poor suffer the effects," highlighting the perceived inequity in how the debt burden impacts different segments of society.