FG and World Bank Clash Over Feasibility of N54.9 Trillion Budget

The World Bank has expressed concerns regarding Nigeria's N54.99 trillion budget for 2025, deeming it excessively ambitious and warning of potential shortfalls that could lead to a return to the Central Bank of Nigeria's Ways and Means financing.

The institution raised doubts about the assumptions related to oil production and revenue, advocating for more profound reforms, the elimination of electricity subsidies, and enhanced fiscal discipline. In contrast, Budget Minister Abubakar Bagudu defended the budget, describing the projections as reasonable and in line with Nigeria's capabilities, asserting that budgets should reflect the nation's potential rather than its current constraints. Despite the World Bank's warnings, government officials emphasized revenue growth, increasing investor interest, and ongoing reforms aimed at achieving Nigeria's goal of a $1 trillion economy by 2030. The Federal Government is relying on the planned privatization of state-owned enterprises, an increase in value-added tax (VAT), and improved tax administration to enhance revenue. Furthermore, the government is optimistic about the African Continental Free Trade Area (AfCFTA) boosting trade volumes and attracting foreign investments. Nevertheless, the World Bank cautioned that the government's dependence on oil revenue is a significant concern due to the volatility of global oil prices. It recommended diversifying revenue sources and investing in human capital development to alleviate poverty and inequality.

In response, the government highlighted its initiatives to revitalize the agricultural sector, enhance infrastructure, and support small and medium-sized enterprises (SMEs). It also pointed out that the 2025 budget allocates a considerable amount to social welfare programs, including education and healthcare, to combat poverty and inequality.

As discussions progress, it remains uncertain whether the government's optimistic forecasts will come to fruition or if the World Bank's warnings will be validated. What is clear, however, is that the success of Nigeria's budget and economic development strategies depends on the government's ability to balance ambition with reality. Coretvnews reports