The Lagos Chamber of Commerce and Industry (LCCI) has expressed serious concern about the feasibility of funding Nigeria’s capital expenditure in the 2025 national budget, warning that the current fiscal structure is unsustainable and incapable of supporting development goals.
Speaking on Thursday during a press briefing on the state of the economy in Lagos, LCCI President Gabriel Idahosa said the capital spending outlined in the 2025 budget is “effectively unfunded” due to the government’s rising debt obligations and recurrent costs exceeding projected revenues.
“The sum of debt servicing and recurrent expenditure is greater than projected revenues, which implies that capital expenditure is left without adequate funding,” Idahosa stated.
The 2025 national budget stands at ₦54.99 trillion, but the LCCI notes that this figure appears smaller in dollar terms due to ongoing exchange rate depreciation, which undermines the budget’s real value and impact.
Breakdown of Key Budget Components:
- Debt Servicing: ₦14.317 trillion
- Recurrent Expenditure: ₦13.64 trillion
- Capital Expenditure: ₦23.96 trillion
- Fiscal Deficit: ₦13.08 trillion
“The rising cost of debt and recurrent obligations is crowding out developmental spending,” Idahosa said.
The LCCI warned that Nigeria’s public debt is on a sharp rise, noting that the total debt stock hit ₦144.67 trillion by December 2024 — a 48.6% increase from ₦97.34 trillion the previous year. With plans to borrow ₦13 trillion to fund the 2025 deficit, the debt could rise beyond ₦157 trillion by year-end.
“The government must review its debt management strategy and ensure borrowings are tied strictly to productive and revenue-generating projects,” the chamber advised.
To bridge infrastructure gaps and improve competitiveness, the LCCI urged the Federal Government to create models that attract private investment into strategic assets, including transport, energy, and technology.
The chamber also emphasized the importance of policy consistency, investor confidence, and transparent fiscal governance.
While backing ongoing tax reforms, the chamber cautioned the government against imposing new taxes that could worsen the economic strain on citizens.
“We support reforms aimed at building an efficient tax system but advise against measures that increase hardship. The focus should be on expanding the tax net, not raising rates,” Idahosa said.
The LCCI concluded by calling for a comprehensive overhaul of Nigeria’s fiscal approach, stating that only through strategic reforms can the country build a more sustainable, investment-friendly economy.
