The Lagos Chamber of Commerce and Industry has expressed concern over the feasibility of implementing Nigeria’s capital expenditure in the 2025 budget, warning that the current fiscal structure cannot fund it.
Speaking at a press briefing in Lagos on the state of the economy on Thursday, LCCI President Gabriel Idahosa stated that the Federal Government’s capital spending is effectively unfunded, with the combined total of debt service and recurrent expenditure exceeding projected revenues.
“The chamber notes that the budget size at N54.99tn, though large in Naira terms, is relatively smaller in dollar value considering the exchange rate depreciation,” Idahosa submitted.
“The chamber is worried about the feasibility of capital spending, given that the sum of debt service and recurrent expenditure is greater than the revenue projections, implying that capital spending is left without revenue for implementation.”
According to the LCCI president, while the 2025 budget size of N54.99tn may appear substantial in naira terms, it is smaller in dollar value due to the depreciation of the local currency.
He noted that N14.317tn is earmarked for debt servicing, N13.64tn for recurrent expenditure, and N23.96tn for capital expenditure, with a fiscal deficit of N13.08tn.
Idahosa warned that the rising cost of debt and recurrent obligations could jeopardise development goals, advising, “The Federal Government must develop a model to attract private investment in strategic infrastructural assets to improve the country’s competitiveness.”
He further stressed the importance of tying borrowings strictly to productive projects, urging that government borrowings be project-tied.
Highlighting Nigeria’s growing debt stock, the Chamber noted that the country’s total public debt rose to N144.67tn as of December 2024, a 48.58 per cent increase from N97.34tn the previous year.
The figure is expected to climb to over N157tn by December 2025 due to the planned N13tn borrowing to finance the budget deficit.
“The Chamber notes improvement in the government’s fiscal situation; however, it is worried about the government’s new borrowings, particularly when such borrowings are not for productive investments,” Idahosa said.
He called on the government to revisit its debt management strategy to explore cheaper financing options by leveraging national assets more efficiently.
On revenue generation, the chamber backed ongoing tax reforms but warned against measures that may further burden citizens. “We urge the government to hasten its tax reforms to ensure a more efficient tax system without pain to the citizens and sustainably improve the country’s revenue,” Idahosa added.
The chamber urged a comprehensive overhaul of the country’s fiscal approach, recommending that the government strengthen policy consistency, attract private sector participation in infrastructure, and build investor confidence to stimulate economic growth.
The LCCI noted that it will continue to engage with government agencies and stakeholders to push for actionable reforms that support the private sector and national development.
