*Photo: President Bola Tinubu *
Introduction
In late 2025, Nigeria’s federal government is set to begin implementing its 2025 budget, a significant departure from the usual fiscal schedule. This shift in the timeline, where the implementation of a fiscal year’s budget begins several months after the budget has been passed, has drawn attention both within the country and globally. The government announced that the N54.99 trillion budget, dubbed the “Budget of Restoration,” would commence implementation by the end of September 2025, nine months after it was passed into law.
This article seeks to explore the implications of this delayed implementation, both for Nigeria and for global budget planning practices. Is this delayed implementation a common practice across nations? Does this present risks or provide opportunities for the Nigerian economy? What lessons can be drawn from other countries that have faced similar delays? We will also explore the key fiscal challenges Nigeria faces in implementing such a massive budget, including revenue generation, transparency, debt servicing, and the challenges of data and reporting.
Nigeria’s 2025 Budget: An Overview
The Nigerian 2025 budget, known as the “Budget of Restoration,” aims to stimulate growth, promote fiscal discipline, and lay the groundwork for a $1 trillion economy by 2030. The budget includes significant initiatives, such as the $30.9 million Nigeria-Japan start-up initiative and ward-based development programs across the country’s 8,809 wards. With ambitious goals, including addressing the country’s public sector challenges and building a robust economy, the government is focusing on reforms in areas such as tax policy and fiscal management.
However, one of the core challenges that has emerged is the delayed implementation of this budget. Typically, budget implementation begins at the start of the fiscal year, yet the Nigerian government has announced that effective implementation will only commence by the end of September 2025. This delay has prompted questions regarding the country’s fiscal discipline, the broader implications for budget execution, and the overall governance of public finances.
The Implications of Delayed Budget Implementation
- Impact on Economic Planning and Forecasting
A delayed budget implementation is problematic for economic planning and forecasting. National budgets provide the framework for financial decisions, allowing both private sector actors and government agencies to align their activities with fiscal policies. The timing of budget execution influences the allocation of resources, the rollout of public services, and the pacing of infrastructure development projects.
In the case of Nigeria, the delay in implementing the 2025 budget can result in significant disruptions to public service delivery. This delay also puts businesses and stakeholders who rely on government contracts and subsidies at risk. Delayed budget implementation leaves companies in a state of uncertainty, particularly those that depend on timely public sector expenditure for their operations.
- Public Trust and Accountability
Transparency and accountability in budget implementation are fundamental to good governance. In Nigeria’s case, the delay in releasing Budget Implementation Reports (BIRs) for the second quarter of 2024 has already raised concerns about the credibility and transparency of the budget process. The Budget Office clarified that the delay in publishing BIRs was due to ongoing verification and reconciliation processes, yet stakeholders have expressed concern about the potential for fiscal mismanagement.
The delayed BIRs, which provide updates on how the government allocates and spends public funds, also mean that citizens and civil society organizations are less able to hold the government accountable for its use of public resources. This delay could erode public trust in government and hinder civic engagement in fiscal matters.
- Strain on Government Services and Development Goals
The Nigerian government has set lofty development goals for 2025 and beyond, including improved public infrastructure, enhanced social services, and more robust fiscal policies. However, delayed budget implementation can hinder the realization of these objectives. Programs aimed at improving healthcare, education, poverty alleviation, and infrastructure may not be able to begin or be scaled as intended due to the delayed disbursement of funds.
Moreover, as the budget’s focus includes economic diversification through initiatives such as the Nigeria-Japan start-up initiative, a delay in implementing these projects could further slow the country’s transition from oil dependence. Nigeria has already made significant strides in diversifying its economy; however, a delay in funding and implementing projects crucial to this diversification could have long-term negative consequences.
- Inflationary Pressures and Debt Servicing
Another significant concern related to delayed budget implementation is the financial strain it places on servicing the national debt. The Nigerian 2025 budget allocates approximately N14.3 trillion for debt servicing, which constitutes a large portion of the total budget. Delaying the implementation of revenue-generating policies and projects might delay or limit the government’s ability to meet its debt obligations, potentially exacerbating inflationary pressures.
With global economic conditions fluctuating and borrowing costs rising, the delayed rollout of fiscal policies and revenue-generating projects might further strain Nigeria’s public finances. This could lead to increased borrowing, potentially hurting the country’s credit rating and international investment confidence.
Global Practices: Is Nigeria’s Budget Delay an Acceptable Convention?
Nigeria’s experience with a delayed budget implementation raises the question: Is this a standard practice in other countries, and how does Nigeria compare to global norms?
Globally, the timing of budget implementation is typically synchronized with the fiscal year. However, some countries face challenges that delay the implementation of their budgets. For example:
- India: While India traditionally begins its budget year in April, there have been instances where the budget’s full implementation faced delays due to political gridlock or procedural delays in passing the budget in Parliament. The Indian government has, at times, resorted to passing a “Vote on Account,” which is essentially an interim budget, to enable the continuation of government operations until the central budget is passed.
- South Africa: In South Africa, budgetary delays sometimes occur when there is a lack of political consensus on fiscal policies. However, South Africa has established systems to prevent the delay from having a significant impact on government operations, including temporary spending measures and pro-rata disbursements until the central budget is fully implemented.
- European Union: Some European countries, such as Italy and Spain, have faced budgetary delays due to political deadlock or economic crises. The EU’s Stability and Growth Pact allows for budgetary flexibility, but delays in implementation are typically avoided through the use of interim financial measures.
From these examples, it is evident that while budgetary delays are not uncommon, the degree to which they are accepted depends on the country’s political stability, fiscal governance systems, and the presence of contingency measures. In Nigeria’s case, the delay of several months presents significant challenges, particularly given the size and scope of the 2025 budget.
Lessons Learned: Can Nigeria Overcome the Budget Delay?
Despite the challenges posed by delayed budget implementation, Nigeria can take steps to mitigate its impact.
- Strengthening Fiscal Management and Accountability: One of the key lessons from global best practices is the importance of robust fiscal management. Nigeria can improve its fiscal discipline by streamlining budget preparation and implementation processes, ensuring that projects are effectively monitored and completed on time.
- Leveraging Technology for Budget Transparency: Transparency in budget reporting is critical for both governmental accountability and public trust. Using digital platforms to provide real-time budget updates, including the publication of BIRs, would significantly improve the government’s responsibility. Nigeria can emulate countries that have adopted online platforms for transparent budget tracking and management.
- Enhancing Stakeholder Engagement: The Nigerian government’s strategy of engaging citizens and local communities in budget processes is an essential step towards ensuring transparency and public involvement. More active citizen participation in budget monitoring would help prevent future delays and improve the quality of fiscal decision-making.
Conclusion
The delayed implementation of Nigeria’s 2025 budget is a significant challenge that could have far-reaching implications for the country’s fiscal health, economic growth, and public trust. While such delays are not unique to Nigeria, the scale of the budget and its ambitious goals make it crucial for the government to streamline budget implementation processes in the future.
Over the past decade, Nigeria has experienced recurring delays in implementing its national budgets. These delays have been caused by various factors, including political disagreements, economic challenges, and administrative transitions. In response, the government has employed strategies such as extending implementation periods, prioritizing critical sectors, and adjusting fiscal calendars to mitigate the impact on development goals. While these measures have provided temporary solutions, the recurring nature of budget delays underscores the need for comprehensive reforms in the budgetary process to ensure timely and effective implementation in the future.
By focusing on improving fiscal management, enhancing transparency, and leveraging technology, Nigeria can mitigate the impact of this delay and continue working toward its goal of becoming a $1 trillion economy by 2030. Ultimately, the key lies in proactive planning, political will, and stakeholder collaboration to ensure that future budgets are implemented promptly, transparently, and efficiently.
Prof. Sarumi is the Chief Strategic Officer, LMS DT Consulting, Faculty, Prowess University, US, and ICLED Business School, and writes from Lagos, Nigeria. He is also a consultant in TVET and indigenous education systems, affiliated with the Global Adaptive Apprenticeship Model (GAAM) research consortium. Tel. 234 803 304 1421, Email: leadershipmgtservice@gmail.com