Business
2025 Budget: South west govs prioritize agric, health, education
Nigeria has entered another budget season, and the government, both at federal and state levels, have laid out their budgets for the 2025 fiscal year.
The preceding year, 2024, to all Nigerians including their governments, at all levels, no doubt was a turbulent one, which called for a reengineering and readjustment of priorities in all spheres of lives of the people.
It was a year that saw high increase in virtually everything, especially energy, food and other amenities, which affected ordinary Nigerians and also got the governments confused on how to tackle both the economic, political and social wellbeing of Nigerians.
It is, however, on this premise that both the states and the Federal governments laid down their 2025 budgetary allocations, aware of previous experiences of the past years, especially 2024.
The implementation of the 2025 budget, which people believed should in all ramifications, help those in power to cut down their excesses, with the inflation trend of the past year in goods, materials and services, which stood at 34.8 % by December 2024.
However, with the new revenue windfall to the different governments as a result of fuel subsidy removal, the governors have also increased the size of their budgets in order to address the immediate challenges in the country, especially food prices.
The south West Region, just like their counterparts in the South East, South South and other states in the Northern parts of Nigeria, have no option but hike their budgets, compared to 2023 and 2024, which were the most testing years in Nigeria, since the past 25 years.
The main focus of the budgetary allocations in the region is agriculture, health, infrastructures, and education.
Despite the fact that their budgetary allocations varies from sectors to sectors, some, have higher stake in capital expenditures while others have bigger allocation for recurrent expenditures.
All the South West governors have both their total budget projections and capital and recurrent expenditures as follows, Ogun State N1.054 trillion, with capital expenditure of N600.98bn representing 60% and the recurrent of N453.56bn, which is 40%: Ondo State has a total budget of N698.65bn, with capital expenditure of N433bn (62%) and recurrent of N265bn (37%), Osun Stste, has total budget of N390bn, with its capital expenditures of N144bn and the recurrent of N246bn; Ekiti State has the total budget of N375.8bn, with the capital of N183.4bn (49%) and recurrent is N192.3bn (51%), and Oyo state has total budget of N678bn.
The pacesetter state has capital expenditure of N343bn, representing (51%), while its recurrent expenditure stands at N335bn which is (49%) of the total budget. It was however, claimed that the 2025 budget of the state is 35 % higher than that of 2024.
The states, which allocated higher percentages to capital expenditures in the region are Ogun, Ondo, and Oyo, while Osun and Ekiti has more for their recurrent expenditures.
Of all the five states captured in this report, Ogun has the highest, which runs in to a trillion compared to others.
The case of Ogun is different because of its proximity to Lagos, which is the commercial and economic hub of Nigeria. Ogun enjoys the same influence on industry, housing and commercial activities, just as Lagos because it is bounded both in its southern, Western, and Eastern axis of Lagos, by Sango-Otta, Sagamu, and Ijebu-Ode. Lagos and Ogun both shares interwoven social and economic advantages.
Shift to capital vote
Although, the way capital and recurrent expenditures are shared varies, but based on the experience of the past in Nigeria, between 2010-2019 it was common for all states, including the Federal to project or allocate more to recurrent, and give capital expenditures less.
This was alleged must have been largely responsible for huge corruption and embezzlement during that period periods of1999 to 2023 when recurrent was made up of 56.66% in some states and always fully funded while capital vote was largely based on deficit at 43.34%.
This shows that recurrent expenditures have been over played above the capital spending, which observers believed has been the cause of infrastructural decays, across the whole of Nigeria for decades.
The higher recurrent expenditures, over the years caters for frivolous spending made government officials award contracts, which ordinarily were not expedient to the demands in their various ministries and agencies.
With the backwardness in all the sectors, which the capital ote is supposed to have catered for over the years and with the realities on ground, it has become expedient for economic development and growth, to ensure infrastructure and human capital development, healthcare services, agriculture, technology etc, which stand as areas that will stabilize the economy with capital spending.
As a departure from the past, the budgets of the states in the South West put agriculture, as their priorities. They have also, determined to make use of the advantages they have with the verse productive and natural and fertile arable land, to grow food and all kinds of crops.
For the mere fact that the President of Nigeria is from their Region, he has made it clear to them that it would be a shame on them not to effectively make use of the arable lands at their disposals to grow foods for their people.
Though President Bola Tinubu collectively addressed the 36 state governors on the need to intensify more efforts on agriculture with their resources to alleviate hunger, sources said that he was very hard on those from the the South West region, reminding them of the past and urged them to go back to the era, when agriculture was the bed-rock of the region.
With this initiatives and encouragement, the governors of the region are expected, apart from growing adequate grains and tubers for the consumption of their people, they are also to grow and increase yields from cash crops, such as cocoa, cashew, rubber, cotton, and as well improve on animal husbandry through ranching, to permanently ward off, herdsmen, who have been posing a big threat to peoples’ farm lands, while moving about to feed their cows in a nomadic form.
With agriculture as their major focus, it is envisaged, that they would all collaborate and ensure that DAWN Commission, which was set up for the agriculture, security and other industrial developments in the region, is properly coordinated to achieve their goals in the implementation of their 2025 budgets.
Internally Generated Revenue
The implementation of projects and programmes of the states in the region in the 2025 budgets has also shifted from the past, when the major financing of projects was from the bulk allocation from the federal government, FAAC, as the internally generated revenue, IGR, would be used to fund most of their projects captured in in the budgets.
That is why state like Oyo is catering for the implementation of its budget through 70% internally generated revenue, while Ogun State has included a huge sum of N120.97bn IGR in its 2025 budget to finance some projects.
How the states stand in their statutory allocations to sectors:
Ogun:
The state has indicated that the capital expenditures would be for funding, purchasing, and maintenance of physical assets, such as buildings, property, roads, primary health care, laboratory and medical equipments across the state, fire stations, rural roads, and extension of Red line Metro Rail among others.
Its recurrent would cater for ongoing operating expenses used for day to day running of the affairs of the state.
The sectoral breakdown of the appropriation bill, which Governor Abiodun called “Budget of Hope and Prosperity,” shows that N453.56 billion will be recurrent expenditure while N600.98 billion will be for capital expenditures. Also, N120.1 billion would go for personnel cost, N37.49 billion for consolidated revenue cost, public debt charges would gulp N76.07 billion, while N219.86 billion would be spent on overhead costs.
To ensure that financing of the budget aligns with the strategy to enhance revenue generation capacity, an estimated N120.97 billion would come from the State Internal Revenue Service, N193.85 billion from Ministries, Departments, and Agencies (MDAs), totaling N314.82 billion. Statutory allocations from the Federal Government, including Value Added Tax to be N228.06 billion, while capital receipts comprising internal and external loans as well as grants and aids are put at N472.66 billion.
For the human capital development, education would gulp N117.83 billion, representing 17 percent of the total budget.
Although the percentage voted for the sector is still very low from the 25 UNESCO recommendations, the figure represents a significant leap forward from the traditional low budget for education under the successive administrations, it was argued.
Further sectoral details indicated that health would gulp N134.538 billion (13 percent), housing and community development N66.382 billion (6 percent), agriculture and industry N65.387 billion (6 percent), infrastructure N284.456 billion (27%), recreation, culture, and religion N25.27 billion (2 percent), social protection N39.836 billion (4 percent), general public service – executive organ N46.863 billion (4 percent), general public service – (financial & fiscal affairs) N42.284 billion.
Ondo State:
Between year 2020 and 2024, Ondo had budgeted over N1.434trn. Its 2020 budget was called “Budget of Growth” of N177.9bn, 2021 “Budget of Hope”: N159.79bn, 2022 “Budget of Economic Re-Engineering”: N194bn, 2023 “Budget of Shared Prosperity”: N313.145bn, 2024 “Budget of Economic Resilience” was N492.045b, while 2025 Appropriation is N698.659bn, increased by N43,429,496,000 above the N655,230bn initially proposed by Governor Lucky Aiyedatiwa, when it was presented to the State Assembly, as the 2025 “Budget of recovery towards fulfilling the promises made to the people of Ondo State during the electioneering processes.”
Gov. Aiyedatiwa indicated that the 2025 budget allocates significant resources to agriculture, infrastructure, education, healthcare, security, and social welfare.
Overview of the 2025 Budget indicates that the objectives and policy thrusts are to “achieve sustained food security; Increased investment in infrastructure; Refocused drive on Independence Revenue (IR) generation; Resilient Community Development Initiative; Facilitate social inclusion and social security and Diversification of economy.”
The budget will be funded by Statutory Allocation – N28.75bn (10.39%); Mineral Derivation – N21.250bn (3.24%); Internally Generated Revenue – N40.500bn (6.18%), VAT N71.559bn (34.92%); Exchange Gain – N50.000bn (7.63%); Ecological Fund – N5bn (0.76%).
Others are Electronic Money Transfer Levy – N5.001bn (0.76%); Other FAAC Revenue – N60.000bn (29.16); Grants – 31.493bn (4.81%) etc
Oyo State:
The State’s budget of N678,086,767,322.18 is christened “Budget of Economic Stabilisation,” and 35 percent higher than the 2024 budget.
“The infrastructure sector receives the largest allocation, with N152.26 billion, or 22.46 per cent, followed by education with N145.26 billion, representing 21.44 percent..
“Additionally, health receives N59 billion, representing nine per cent, while agriculture is allocated N18 billion, or 3%.”
Gov. Seyi Makinde promised that what would be the priority of the government this year is the welfare of the state’s citizens.
Osun State:
Governor Ademola Adeleke’ said that the 2025 budget of the state, called: ‘Budget of Sustainable Growth and Transformation’ has in total N390 billion, out of which N245 billion is earmarked for recurrent expenditure while N144 billion will service capital expenditure.
Of the N245 billion for recurrent expenditure, N102 billion will fund salaries and allowances, as well as Pensions and Gratuities, while the balance of N145 billion is set aside.
The N145bn estimate is the general concerns of the people and the government has to come out to clarify why that huge amount was set aside. and how it was arrived at.
It was explained that by the new law, “the minimum wage in the country is N70,000 and no longer N30,000.
Last year, it was further said, debt servicing was estimated to gulp N27 billion, and with the prevailing exchange rate and the attendant implication on foreign debt repayment, it could go as high as N30 billion in the 2025 fiscal year. This will be funded from the N145 billion recurrent expenditure set aside. Half salary payment for active workers and pensioners owed by the previous APC administration will also be funded from the N145bn.
Ekiti State:
Explaining how the state would spend its budget and the key areas it would go to, Governor Oyebamiji stated that the state is to spend N1.8billion to construct governor, deputy governor’s Lodge In Abuja
The government had earlier planned to spend N520million on the same purpose in its 2024 supplementary budget but was yet to spend any amount between January and August 2024, before the figure was jacked up to N1.8billion in the 2025 budget.
In the same fiscal year, the government plans to spend N400million on renovation, furnishing government house, it plans to spend N25 million on renovation of the Presidential Lodge inside the Government House in Ado-Ekiti.
Another N100million is budgeted for purchase of household equipment such as gas cookers, blenders, air conditioners, refrigerators, dish washers for the Government House in Ado-Ekiti.