Economic reforms gain traction amid weak budget implementation - Punch Newspapers
Minister of Budget and Economic Planning, Abubakar Bagudu. Photo: Premium Times.
The Minister of Budget and Economic Planning, Abubakar Bagudu, has played a major role in shaping Nigeria’s economic reforms over the past three years. In this report, SAMI TUNJI weighs gains in growth, investment, economic planning and statistical reforms against persistent budget implementation challenges and the push to translate policy ambitions into tangible grassroots development. Three years after assuming office as Minister of Budget and Economic Planning, Abubakar Bagudu has occupied a strategic position in President Bola Tinubu’s attempt to reshape Nigeria’s economy through some of its most consequential reforms in decades. From defending fuel subsidy removal and foreign exchange liberalisation to overseeing increasingly ambitious federal budgets, development plans, statistical reforms and a new push to take economic planning down to Nigeria’s 8,809 wards, Bagudu has emerged as one of the administration’s leading advocates of its economic direction. But his third anniversary comes at a complicated point. Nigeria’s macroeconomic numbers have begun to improve, investment flows have recovered and government revenues have expanded, yet poverty remains widespread, federal budgets have struggled with implementation, borrowing has increased and millions of households are still waiting for the promised gains of reform to reach their pockets. The contrast raises a central question about Bagudu’s record: Has Nigeria become better at economic planning, or has the government mainly become better at producing ambitious plans while implementation struggles to keep pace? Defending painful reforms Bagudu entered the Federal Executive Council in August 2023, barely three months after Tinubu declared an end to petrol subsidy and his administration began reforms that would ultimately reshape the foreign exchange market. The policies produced significant fiscal and macroeconomic changes but also contributed to a severe cost-of-living shock as petrol prices increased, the naira depreciated, and inflation accelerated. Bagudu became one of the administration’s most consistent defenders of the reforms. In March 2024, amid growing public dissatisfaction, he acknowledged that the government’s strategy was encountering volatility but argued that its objective was to generate higher and more inclusive growth, increase revenue and create a rules-based foreign exchange market capable of attracting investment. “I am proud to say we are clear about how to handle the challenges. Of course, in the immediate future, we have to respond more to support vulnerable populations and those who are otherwise affected. “But our strategy is very clear, and we appreciate that the National Assembly fully supports all the bold and commendable measures that have been taken even while calling for more interventions to ensure that constituents who are affected by the reform efforts are supported until we tide over the storm, which I believe will be soon,” the minister said while receiving members of the House of Representatives Committee on National Planning and Economic Development. By September that year, he was publicly defending subsidy removal as necessary for Nigeria’s development, while promoting compressed natural gas as an alternative transport fuel. The argument has remained largely unchanged. In May 2025, Bagudu said Tinubu had confronted Nigeria’s economic problems with “bold and necessary choices,” arguing that the decisions were beginning to produce results. “We have seen four quarters of successive economic growth, stability in foreign exchange, and appreciation by Nigerians and the international community,” he said in a feature interview for a television documentary commemorating President Bola Tinubu’s second year in office. There is now evidence to support part of that argument. Nigeria’s real Gross Domestic Product grew by 4.43 per cent year-on-year in the second quarter of 2026, compared with 4.23 per cent in the corresponding period of 2025 and 3.89 per cent in the first quarter of this year. Agriculture expanded by 4.39 per cent while services grew by 4.60 per cent. Foreign capital has also returned strongly. NBS data showed that capital importation climbed 83.83 per cent from $5.64bn in the first quarter of 2025 to $10.37bn in Q1 2026. That performance lends some support to Bagudu’s repeated claim that macroeconomic stabilisation is restoring investor confidence. In July, he went further, arguing that the reforms had turned Nigeria into an attractive destination for long-term investment. Yet the composition of the investment complicates that narrative. Portfolio investment accounted for $9.86bn, or 95.09 per cent, of the $10.37bn inflow in Q1, while foreign direct investment was only $135.08m, representing 1.30 per cent. The production and manufacturing sector attracted just $152.27m. In other words, Nigeria has become considerably more attractive to investors seeking financial assets, but the corresponding surge in long-term productive capital required to build factories and create large numbers of jobs remains less visible. The IMF reached a similar conclusion in June. It said reforms since 2023 had strengthened macroeconomic stability, reduced fiscal vulnerabilities, rebuilt external buffers and improved the functioning of the foreign exchange market. But it warned that poverty, food insecurity, infrastructure deficits and constrained fiscal space remained serious problems. Bigger budgets, weaker execution If there is one area where Bagudu’s performance can be judged directly, it is the federal budget. As minister, he sits at the centre of preparing the Medium-Term Expenditure Framework, annual federal budgets and national development plans. His tenure has coincided with a massive expansion in government expenditure. The 2026 Appropriation Act signed in April stands at N68.32tn, including N32.2tn for capital expenditure, N15.8tn for debt servicing, N15.4tn for recurrent expenditure and N4.799tn for statutory transfers. On paper, allocating almost half of expenditure to capital projects represents an ambitious attempt to address Nigeria’s infrastructure deficit. The difficulty is execution. When Tinubu presented the original 2026 budget proposal in December 2025, he acknowledged that only N18.6tn, representing 61 per cent of the government’s revenue target, had been realised by the third quarter of 2025. Expenditure stood at N24.66tn, or 60 per cent of the target. Capital performance was substantially worse. Only N3.10tn, equivalent to 17.7 per cent of the 2025 capital budget, had been released by the third quarter. The government attributed the low performance partly to its decision to concentrate resources on completing projects contained in the 2024 budget, for which N2.23tn had been released as of June 2025. FG targets 200 new telecom sites before December Subsidy was never Nigeria’s problem Nigeria, India move to revive $15bn bilateral trade Also, while appropriation has been organised around the calendar year, implementation increasingly crossed fiscal boundaries. The 2024 capital budget ran deep into 2025. The 2025 capital budget was subsequently extended until June 30, 2026, even as the N68.32tn 2026 budget took effect. The IMF also flagged weaknesses in Nigeria’s public financial management. Its 2026 Article IV assessment called for accelerated reforms to the budget process, fiscal reporting, transparency and accountability, while raising concerns over off-budget expenditure and complex financing arrangements. Amid criticisms, the Director General, Budget Office of the Federation, Dr Tanimu Yakubu, said that the operation of multiple budgets by the Federal Government is not a fiscal anomaly but permitted under the laws. “The presence of multiple concurrent budgets does not imply fiscal confusion. It reflects a performance-based, transitional budget system,” Yakubu said. However, Tinubu himself acknowledged the weakness in December when he declared, “The most significant budget is not the one we announce. It is the one we deliver.” He subsequently directed Bagudu, alongside other fiscal authorities, to enforce stronger budget discipline. The government further acknowledged another underlying problem. The Economic Management Team approved the creation of an inter-agency committee to harmonise macroeconomic assumptions after identifying conflicting forecasts for crude oil prices, production, exchange rates, inflation and non-oil revenues as contributors to gaps between budget projections and actual outcomes. Taking planning to the wards Beyond annual budgets, Bagudu has sought to change the architecture of economic planning itself. The clearest example is the Renewed Hope Ward Development Programme, which seeks to move economic intervention away from predominantly top-down national programmes towards targeted activities in each of Nigeria’s 8,809 wards. Bagudu has described the initiative as central to the administration’s ambition to build a $1tn economy by 2030. Under the plan, the government intends to map economic activities at ward level and support agriculture, trade, food processing, mining and other productive activities. The target is to bring at least 10 million Nigerians into productive economic activity, including at least 1,000 people in each ward. In September 2025, Bagudu sought World Bank support for the programme, saying Nigeria had studied poverty-reduction and grassroots development experiences in China, India and Kenya but intended to design a model reflecting its federal system. “The objectives, among others, are to promote sustainable and inclusive growth at the ward level, which will contribute to national development,” he said. The approach is potentially important because one of Nigeria’s longstanding development problems is the disconnect between impressive national plans and economic conditions at community level. After meeting the minister, the World Bank Country Director, Mr Matthew Verghis, hailed the ward development initiative as timely and practical. “The challenge is not just in designing new programmes but in building on what already works. Existing projects such as NG-CARES and the Nigeria for Women Project have established effective structures. “We are eager to expand on these models, bring in global experience from India, China, and Kenya, and provide both technical and financial support to strengthen implementation,” Verghis added. He stressed that grassroots development must align with Nigeria’s long-term priorities. The ministry has simultaneously been working on the National Development Plan 2026–2030, intended to translate Nigeria Agenda 2050 and the administration’s $1tn economy ambition into medium-term priorities. It has also coordinated the $500m World Bank-backed HOPE Governance Programme, aimed at improving governance and service delivery in basic education and primary healthcare across states. The ministry also partnered with the Infrastructure Concession Regulatory Commission to advance cassava bio-ethanol projects across Nigeria’s six geopolitical zones, as part of efforts to develop domestic ethanol production and agricultural value chains. The projects are projected to create more than 8,000 direct and indirect jobs, although the employment figure remains a target tied to successful implementation rather than jobs already created. Another part of Bagudu’s record is the overhaul of economic statistics under the NBS, an agency supervised by the ministry. The bureau rebased GDP from a 2010 to 2019 base year and updated the Consumer Price Index framework. The GDP rebasing captured previously underrepresented activities including digital services, fintech, creative industries, maritime transport, tourism and informal trade. Following the exercise, Nigeria’s nominal GDP for 2024 was recalculated at N372.82tn, providing a broader picture of economic activity. The NBS had explained before the exercise that the rebasing was intended to make economic indicators better reflect changes in the structure of the economy and was being undertaken in line with the United Nations Fundamental Principles of Official Statistics. The ministry has also pushed results-based management, geospatial planning, monitoring and evaluation, social protection reform and coordination of development financing. In August, NEC endorsed the Revised National Social Protection Policy 2026–2030 presented by Bagudu, designed to strengthen coordination, financing, implementation and accountability across federal and state social interventions. These initiatives suggest an attempt to move economic planning beyond preparing annual expenditure documents, moving it beyond statistics to social impact. Sami Tunji Sami Tunji is a Senior Business Correspondent at Punch Newspapers with about five years of experience in data-driven reporting. He covers finance, ICT, and broader macroeconomic issues, combining analytical insight with clear storytelling. Sami’s work reflects strong editorial judgment, professional development, and a commitment to accurate and informative business journalism.
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