Economic Crisis Bites, Tinubu Capitalist Regime prioritises debt repayment over public welfare

By Lateef Adams

In December 2025, President Tinubu presented the 2026 budget of N58.18 trillion to the National Assembly, a figure that many Nigerians are still unclear about, given the system of running multiple budgets within a calendar year. While a new budget is being passed by the National Assembly, it is at the same time extending the 2025 budget implementation till June 30, 2026. This means that under this system, while the government presents the budget as a ‘national plan for development’, the pattern of poor implementation and continuous rollovers exposes the deception of capitalist planning, where budgets exist more as instruments for elite enrichment and contract inflation rather than as genuine tools for the socio-economic development of the working masses. The 2026 budget structure is not anything different from the previous ones, except in terms of volume. The N58.18 trillion presented budget has been increased to N68.32 trillion by the National Assembly, with the justification of “infrastructure development and improved security”; this is the same narrative used repeatedly to justify increases.

The budget highlights include expected revenue of N34.33 trillion and a budget deficit of N23.85 trillion, which is going to be financed through new borrowings. Debt servicing is allocated N15.9 trillion, which is about 23 percent of the total budget, and before the budget was passed by the Senate, $6.9 billion was approved for borrowing. The crude oil price benchmark is pegged at $75 per barrel, oil production at 1.84 million barrels per day, and the exchange rate at N1,512 to a dollar.

These figures churned out every year by the ruling elite have become unconvincing to working people, as they have yet to translate into any meaningful improvement in the economy or in the living conditions of the masses. A look at previously approved and implemented budgets is a clear testament that successive capitalist regimes have not improved any sector of the economy, despite the huge budgetary allocations over the years. This year’s budget, like others before it, does not provide a clear plan to address the core challenges facing the economy or to improve the living conditions of the working people. For instance, the Manufacturers Association of Nigeria (MAN) in a 2025 report stated that “manufacturers spend 40 percent of their total production cost on generating energy for their businesses” (BusinessDay, 28 February 2025). Professional groups have also continued to attribute the major challenges in the healthcare sector in Nigeria to inadequate allocation of financial resources to improve and maintain public health.

Surprisingly, Security and Defence received the highest allocation got N5.41 trillion (7.9% of the total budget), while the Health and Education sectors were allocated a paltry N2.48 trillion and N3.52 trillion, representing 3.6% and 5.2% respectively. These allocations contravene international benchmarks and recommendations for developing countries like Nigeria, which typically prescribe minimum percentages of the national budget. According to the Abuja Declaration, at least 15% of the national budget should be allocated to the health sector, while the UNESCO Incheon Declaration recommends that 15–20% of the total budget, or 4–6% of GDP, be allocated to the education sector.

The Tinubu-led APC government, like past PDP administrations, has not committed resources to meet these benchmarks, leaving these critical sectors at the brink of collapse. However, the problem goes beyond mere allocation. Under a corrupt, neoliberal, and anti-people capitalist system, even increased funding within the existing framework would not automatically translate into real development. What is required is a fundamental break from profit-driven policies towards a democratically planned economy, where resources are collectively owned, managed, and controlled by the working people themselves. Only under such a system can waste, corruption, and elite capture be eliminated, and public resources be directed towards meeting the real needs of society rather than the accumulation of wealth for a privileged few.

2025 Budget and the Economy Today

The 2025 approved budget signed into law by president Tinubu is N54.99 trillion. A total revenue to be generated was N41.81 trillion with a deficit of N13.08 trillion. After the budget cycle, the working people are yet to see any tangible capital project that got N23.44 trillion in the country. During the period of the budget presentation, the statement we issued remain obvious  “A critical analysis of President Tinubu’s proposed 2025 budget should raise significant alarm among working Nigerians, as the economic outlook for the coming year appears even more heartbreaking than that of 2024. Despite its massive size, amounting to ₦49.7 trillion, the budget poses serious challenges that threaten to worsen the nation’s economic sufferings.

One of the most troubling aspects is the allocation of ₦15 trillion (31% of the total budget) for debt servicing. This staggering amount underscores Nigeria’s heavy dependence on borrowing to sustain its fiscal operations. Furthermore, the budget includes a deficit of ₦13 trillion, signaling the government’s intention to engage in even more borrowing to fund its programs.” The economy continued its chronic decline with every sector facing much serious challenge. The meagre monthly minimum wage of N70,000 approved just recently has become near irrelevant as inflation and high cost of living make it inadequate for the working people. Security and defence which gulp the highest allocation is in a sorry state. The insecurity in the country has gone worsen characterize by high rate of banditry, kidnappings and extreme violence most especially in the North central part of the country. The Nigeria Insecurity Tracker (NIT) reported 805 lives lost in the first two months of 2026.  

A huge percentage of the country’s resources is used to service loans, such that these burdens are far higher than the budgets allocated to major sectors of the economy. This is the reality of capitalism, where a country’s resources are manipulated for the benefit of multilateral organisations like the International Monetary Fund and World Bank at the expense of ordinary people. Under such a system, where a larger share of resources is devoted to debt servicing (not repayment), it reduces the fiscal space for investment in critical sectors like security, education, health, and infrastructure. No meaningful development can take place under these conditions. This is one of the key reasons the country remains in deep poverty, as essential sectors are consistently underfunded.

Debt Servicing and Increased Hardship

Over one-third of the 2025 budget and about 23 percent of the 2026 budget is allocated to servicing debt. This is a serious situation that working people must challenge. These huge allocations are what continue to justify the meagre funding of the health and education sectors. We in the Movement for a Socialist Alternative (MSA) having drawn such a conclusion cannot but wonder why organised labour, the Nigeria Labour Congress NLC and the Trade Union Congress of Nigeria (TUC) have not also drawn the same conclusion and take the necessary steps to resist this system that drains the economy and deepens poverty of the working masses in the country.

The process remains largely opaque to the Nigerian people. Every year, the government budgets huge sums for debt servicing without any clear accountability for what the borrowings were primarily used for. According to a report by the Debt Management Office, Nigeria’s total public debt profile rose to N153.29 trillion as at September 30, 2025, with projections suggesting it could approach N200 trillion by the end of the year due to the huge 2026 budget deficit.

In 2023, when President Bola Ahmed Tinubu assumed office, the debt profile stood at about N87 trillion, according to the DMO. In just over two years, the regime has nearly doubled the country’s debt. About 31 percent of the 2025 budget and 23 percent of the 2026 budget are set aside for debt servicing, a scenario that should worry many Nigerians, especially at a time when all major sectors require substantial funding.

War in the Middle East and Surge in Crude Oil Price

The country is in a position to increase its revenue and even adequately fund the 2026 budget due to the surge in the price of crude oil. With a benchmark of $75 per barrel, the ongoing conflict involving the US/Israel and Iran has pushed global oil prices to over $100 per barrel. If this regime is transparent and accountable in the management of the country’s resources, this period should provide an opportunity to strengthen public finances, reduce borrowing, and invest meaningfully in critical sectors of the economy.

However, will this translate into real benefits for the working people? Experience has consistently shown that even during periods of high oil prices, the gains are not channelled towards improving living conditions but are instead captured by a narrow elite through corruption, mismanagement, and pro-capitalist policies. Without a fundamental break from this system, increased oil revenue will only deepen the cycle of inequality, waste, and underdevelopment rather than bring any real relief to the masses.