Why the Federal Government Is Running Three Budgets at Once – Budget Office

The Federal Government’s simultaneous operation of the 2024 Appropriation Act, the 2024 Supplementary Budget, and the 2025 Appropriation Act is a deliberate strategy to ensure continuity and effective delivery of capital projects, according to the Budget Office of the Federation.

Speaking on the matter, the Director General of the Budget Office, Tanimu Yakubu, dismissed concerns that the multi-budget approach signals fiscal disorder. He explained that the practice is rooted in legal and administrative realities, and reflects a transitional phase in Nigeria’s evolving public finance system.

Yakubu stated that the National Assembly’s recent decision to extend the capital component of the 2024 budget to December 31 is consistent with global best practices and statutory provisions. He noted that the coexistence of budgets is supported by laws such as the Finance Act and provisions in the Appropriation Act, as well as Central Bank of Nigeria circulars that allow for capital rollovers, early cash-flow mechanisms, and dual accounting for complex or externally-financed projects.

“This is not fiscal dysfunction—it is the transitional cost of trying to modernise a complex, high-volume national budget system,” Yakubu said. He stressed that the key issue is not the number of budgets but how well they are coordinated and transparently executed.

According to him, while the 2025 budget is already being implemented to maintain the January–December cycle, disbursements from the 2024 and its supplementary budget are still being lawfully executed. These include statutory obligations, capital projects, and procurement processes tied to the 2024 project codes. He added that the supplementary budget was introduced to address pressing national needs such as rising security challenges, humanitarian concerns, and economic shocks that were not anticipated when the main budget was signed in January 2024.

Yakubu also clarified that this budgeting overlap is neither irregular nor unique to Nigeria. Countries like India, Indonesia, and Kenya often encounter similar overlaps as they reconcile budget planning with real-world execution timelines.

Economic experts, however, say that while the government’s approach may be legal, it reflects deeper structural issues in Nigeria’s budget process. Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), said that persistent underperformance in capital budget implementation and unrealistic revenue assumptions are key factors contributing to the overlap.

Yusuf cited the 2024 revenue shortfall—partly due to underachieved oil production targets and forward crude sales—as evidence that the federal budget was overly ambitious. He also pointed to rising debt service costs, which continue to constrain fiscal space and delay capital expenditure.

He called for urgent reforms to align Nigeria’s budget more closely with a realistic revenue profile and fiscal cycle. “Capital projects should be strictly aligned with the realistic capacity to fund them. It’s perhaps time to reform the budget process to make our budgets more realistic,” he said.

Despite the challenges, Yakubu insists that Nigeria’s current multi-budget environment is part of a broader reform effort to build a more agile and accountable public finance system.