Atiku Abubakar, the 2023 presidential candidate of the Peoples Democratic Party (PDP), has taken aim at President Bola Tinubu, accusing him of repeating the same borrowing mistakes made by his predecessor, Muhammadu Buhari. Atiku’s critique focused on the proposed 2025 budget, which he believes fails to address Nigeria’s deep economic issues.
In a statement released on Sunday, Atiku criticized the budget for lacking the structural reforms and fiscal discipline necessary to solve Nigeria’s complex economic challenges. He expressed doubts that the budget would lead to sustainable growth or resolve the country’s long-standing issues.
“By the third quarter of 2024, less than 35% of the capital expenditure allocated to ministries, departments, and agencies had been disbursed, despite claims of 85% budget implementation,” Atiku noted. This, he argued, signaled poor execution capabilities and raised concerns about the 2025 budget’s effectiveness.
On Wednesday, President Tinubu had presented a N47.9 trillion budget proposal to a joint session of the National Assembly. The budget includes allocations of N4.91 trillion for defense and security, N4.06 trillion for infrastructure, N2.48 trillion for health, and N3.52 trillion for education. However, Atiku quickly pointed out what he considered to be a continuation of the flawed fiscal practices that have characterized the APC-led government since 2016.
The former Vice President particularly criticized the budget’s reliance on deficit financing. “The administration plans to secure over N13 trillion in new borrowings, including N9 trillion in direct loans and N4 trillion in project-specific financing,” Atiku explained. He warned that this borrowing strategy mirrored the approach of previous administrations, which had led to escalating public debt and increased risks related to interest payments and foreign exchange exposure.
Atiku further criticized the budget’s heavy debt servicing allocation, which he said would amount to N15.8 trillion, representing 33% of total expenditure. This, according to Atiku, was nearly equal to the planned capital expenditure of N16 trillion, which makes up 34% of the budget. He argued that such an imbalance undermines fiscal stability and limits funds for essential development projects.
“The government’s recurrent expenditure, which accounts for over N14 trillion (30% of the budget), remains disproportionately high,” Atiku said. He explained that this reflected an oversized bureaucracy and inefficient public enterprises, leaving limited resources for development projects. “This imbalance perpetuates a cycle of increasing borrowing,” he added.
Atiku also pointed to the inadequacy of the proposed capital spending, which he claimed would leave insufficient funds to address Nigeria’s infrastructure deficit. After accounting for debt servicing and recurrent expenditure, the funds remaining for capital projects were only 25% to 34% of the total budget. “This equates to an average capital allocation of N80,000 (approximately $45) per capita, which is inadequate for a country grappling with slow economic growth and infrastructural underdevelopment,” Atiku argued.
Additionally, Atiku took issue with the administration’s decision to increase the value-added tax (VAT) rate from 7.5% to 10%. He described the move as a regressive measure that would worsen the cost-of-living crisis and slow down economic growth. “By imposing additional tax burdens on an already struggling populace, without addressing inefficiencies in governance, the government risks stifling domestic consumption and deepening economic hardship,” Atiku stated.
Atiku urged the administration to rethink its borrowing strategy and prioritize reforms aimed at achieving long-term fiscal sustainability and economic growth. He emphasized the need for a shift towards disciplined, growth-focused fiscal policies that would reduce waste, improve the efficiency of public spending, and invest in critical sectors of the economy.
