Tag: Senator Abubakar Atiku Bagudu

The federal government has disclosed that Nigeria must attract a minimum of $100 billion in infrastructure investment annually if the country is to meet its ambitious goal of attaining a per capita Gross Domestic Product (GDP) of $30,000 by the year 2050.

Minister of Budget and Economic Planning, Senator Abubakar Atiku Bagudu, made this known during a courtesy visit by the new Japanese Ambassador to Nigeria, Mr. Hideo Suzuki, to his office in Abuja.

Bagudu noted that road infrastructure remains a vital pillar of the Nigerian economy, given the country’s dependence on land transportation for the movement of goods and services. He said the government is pursuing stronger partnerships with international allies like Japan to accelerate infrastructure development and unlock long-term economic growth.

He stated: “Our Agenda 2050 Long-Term Development Plan has identified a minimum annual infrastructure investment requirement of $100 billion if we are to meet our target of $30,000 per capita GDP by 2050. In alignment with President Bola Ahmed Tinubu’s eight-point agenda, we are also working toward building a $1 trillion economy within the next five years. This is an ambitious goal, and we are already more than 10 percent of the way there.”

The minister said Nigeria is implementing targeted strategies to address underinvestment in critical infrastructure and expressed optimism about the potential contributions of the Japanese International Cooperation Agency (JICA). According to him, JICA’s global track record of delivering impactful development projects could play a meaningful role in Nigeria’s economic transformation.

He welcomed Japan’s growing development footprint in Nigeria and observed that the exchange of ideas and solutions between both countries will strengthen their respective goals and development identities.

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Speaking during the visit, Ambassador Hideo Suzuki provided an update on several Japanese-led development projects in Nigeria. He stated that the “Data Collection Survey on Transport and Logistics in Nigeria” was progressing steadily and forms part of a broader collaboration with the Nigerian government.

He also noted the Project for the Development of Supporting Environment for Startups and Addressing Social Challenges, signed in Abuja in April 2024. According to Suzuki, it is the first project of its kind ever launched by Japan globally and has already gained substantial attention in Tokyo due to its creative and inclusive framework.

Other key initiatives supported by Japan include the FCT Reduction of Non-Revenue Water Project; the Promotion of Market-Oriented Agricultural Extension Systems for Livelihood Improvement; and the Post-Harvest Processing and Marketing Pilot Project in Nasarawa and Niger States.

“These projects show Japan’s strong commitment to working with Nigeria in developing inclusive and effective solutions to real-world challenges,” Suzuki said. “We hope to deepen our engagement across sectors and contribute to Nigeria’s development aspirations.”

Suzuki officially resumed his role as ambassador following the departure of his predecessor, Ambassador Matsunaga Kazuyoshi, who served for four years in Nigeria.

Also speaking, Dr. Samson Ebimaro, Director overseeing the Office of the Permanent Secretary and Director of the International Cooperation Department, explained that the ministry’s mandate is to facilitate national growth by stimulating productive sectors and creating an environment conducive to investment.

“Delivering on key economic targets requires reliable and modern infrastructure systems, particularly in transportation,” he said. “This is central to boosting GDP and energizing economic activity.”

The three tiers of government have seen more than 37 per cent increase in their revenues from the federation account so far this year as reforms aimed at enhancing the operating efficiency of government agencies gathered momentum.

Data obtained from the Federation Account Allocation Committee (FAAC) yesterday showed that total disbursements to the three tiers of government have increased by more than one-third over the past two months compared with the corresponding period of the previous year.

The increase in general government’s revenue was attributed to improved operational efficiency across key ministries, departments and agencies (MDAs).

Total revenues received by the three tiers of government so far this year stood at N3.127 trillion compared with N2.276 trillion received within the comparable period of 2024, representing an increase of N851 billion or 37.4 per cent.

Minister of Budget and Economic Planning, Senator Abubakar Atiku Bagudu, said government expects revenue-to-Gross Domestic Product (GDP), which stood at some nine per cent in 2023, to increase to 18 per cent next year.

Bagudu said the increase in government’s revenue capacity underlined the gains of ongoing economic reforms, which have led to improvement in operational efficiency of government’s business.

He expressed optimism that ongoing reforms would continue to positively impact the nation’s oil production, pointing out although the country had surpassed the oil production target of 2.1 million barrels per day, security remained a key challenge, with pipeline vandalism and other infrastructure concerns limiting output.

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On oil prices, which recently dipped below $70 per barrel, Bagudu reassured Nigerians that while external pressure to cut oil production was rising, the government believed in the resilience of global demand.

He pointed out that despite a temporary decline, oil prices are expected to stabilise over the long term, with little immediate impact on Nigeria’s oil revenue assumptions for the 2025 budget.

Managing Director, Ambosit Capital Managers, Dr. Wahab Balogun, said the significant rise in FAAC allocations over the past two months could unlock substantial improvements in infrastructure, especially at the subnational level, where most public service delivery occurs.

“With state governments receiving a combined N1.089 trillion and local government councils N796.321 billion from revenues generated in December 2024 and January 2025, there is now greater fiscal space for capital expenditure on roads, schools, hospitals, water projects, and other essential infrastructure.

“The increase in FAAC disbursements provides subnational governments with the rare opportunity to close infrastructure gaps, particularly in rural and underserved communities. It also allows them to meet counterpart funding obligations with development partners, thereby unlocking even more resources for critical projects,” Balogun said.

According to him, beyond infrastructure, the injection of funds into the economy is expected to stimulate job creation, especially in the construction sector, where public works have a high employment multiplier. This could have a ripple effect on local economies, boosting household incomes and increasing consumption at a time when many communities are grappling with the effects of inflation and economic uncertainty.

He however cautioned that the extent of the impact would depend heavily on how states and local governments prioritize their spending.

According to him, historically, revenue windfalls have often been diverted toward recurrent expenses such as salaries and overheads, rather than long-term investments in physical and social infrastructure.

“Without sound fiscal management, the revenue increase may not translate into meaningful improvements for the populace.  Governance quality and financial discipline will determine whether this revenue surge leads to real development or merely supports consumption,” Balogun said.

He reiterated that the current revenue trend offers a positive fiscal outlook, stressing that if managed effectively, it could lead to enhanced economic competitiveness, poverty reduction, and inclusive growth at the grassroots level.

A breakdown showed that from the total N3.127 trillion disbursed over the past two months, the Federal Government received N1.003 trillion, state governments got N1.089 trillion, while local government councils were allocated N796.321 billion. Additionally, oil-producing states received N238.761 billion as 13 per cent derivation revenue—a constitutional entitlement derived from revenue generated from natural resources.

A month-by-month breakdown indicated that in January 2025, covering revenue generated in December 2024) FAAC distributed N1.424 trillion. This rose to N1.703 trillion in February 2025, from January 2025 revenue, representing a 19.6 per cent increase month-on-month. This sharp rise was largely driven by an increase in statutory revenues and VAT collections.

Specifically, the Federal Government received N451.193 billion in January and N552.591 billion in February. The 36 states collectively received N498.498 billion in January and N590.614 billion in February. Local governments saw a similar increase, moving from N361.754 billion to N434.567 billion over the two months.

For oil-producing states, derivation revenue increased from N113.477 billion in January to N125.284 billion in February, reflecting fluctuations in mineral revenue collections.

A significant driver of the improved allocations was growth in VAT collections, which rose from N604.872 billion in December 2024 to N718.781 billion in January 2025, amounting to N1.324 trillion over the two-month period. This surge indicates both better compliance with consumption tax laws and rising consumer spending in early 2025—a positive signal for domestic demand and business activity.

Statutory revenue, which had dipped to N386.124 billion in December 2024, rebounded strongly to N749.727 billion in January 2025. This rebound suggests improved performance in key revenue-generating sectors such as oil, customs, corporate income tax, and petroleum profit tax. The doubling of statutory revenue in a single month reveals the potential for fiscal stability, especially if this momentum is sustained in the months ahead.

However, not all revenue components followed the upward trend. The Electronic Money Transfer Levy (EMTL), introduced to capture taxes on digital financial transactions, declined from N31.211 billion in December to N20.548 billion in January. This decline may reflect shifts in transaction patterns, possibly due to seasonality or increased cash-based transactions after the festive period.

With states collectively receiving over N1 trillion in just two months, the capacity to finance infrastructure projects, pay salaries, and meet other financial obligations has improved. In particular, the higher allocation to states and local governments—the frontlines of public service delivery—suggests a potential uptick in grassroots-level development. Governments now have more room to address critical needs such as road construction, healthcare delivery, education, and other social services.

The inflow of funds also provides an opportunity for the federal government to clear pending obligations, ramp up capital expenditure, and support economic growth. Higher VAT revenue implies better consumer activity, and this could further stimulate demand if translated into increased public investment.