Nigeria is currently operating three separate budget instruments simultaneously: the 2024 Appropriation Act, the 2024 Supplementary Budget, and the 2025 Appropriation Act. While this unusual fiscal overlap might appear confusing to the uninitiated, it is neither unprecedented nor a sign of dysfunction. Instead, it reflects the realities of managing a complex national budget system that is undergoing reforms to improve efficiency, flexibility, and responsiveness.
According to Dr. Tanimu Yakubu, Director-General of the Budget Office of the Federation (BOF), the situation is entirely legal and is rooted in the practical demands of budget execution, project timelines, and administrative transitions. The 2024 main budget, signed into law in January, remains in effect until December 31, 2024, and continues to serve as the legal framework for federal spending this year. It covers capital projects, statutory expenditures, and contract obligations tied to the 2024 fiscal year, and therefore must remain active until all related commitments are completed.
Midway through the year, the federal government introduced a supplementary budget to address unforeseen developments such as heightened security and humanitarian needs, economic shocks, and revenue reallocations. Rather than replacing the main budget, the supplementary budget serves as a fiscal extension, designed to respond to urgent priorities that could not have been fully anticipated when the main budget was passed.
Meanwhile, in a bid to sustain the January-to-December budget cycle, the 2025 Appropriation Act was signed into law before the close of 2024. However, the transition from one fiscal year to another is rarely seamless. Many capital projects funded in 2024 remain incomplete due to procurement delays, unspent but committed funds, and the complexity of multi-year or donor-financed initiatives that extend across fiscal periods. As a result, elements of the 2024 and supplementary budgets must run concurrently with the new 2025 budget.
Dr. Yakubu emphasized that this is not unique to Nigeria. Other developing countries with large-scale development programs—such as India, Indonesia, and Kenya—often experience similar fiscal overlaps. What makes such a system work is the legal infrastructure that supports it. Nigeria’s Finance Act, various clauses in the Appropriation Acts, and Central Bank regulations all provide mechanisms for rolling over capital releases, bridging cash flows, and maintaining parallel accounting systems when necessary.
The presence of three budgets, therefore, is not a breakdown in public financial management. Rather, it is a reflection of a transitional framework designed to accommodate the country’s developmental ambitions while ensuring fiscal discipline and continuity. It is also part of broader reforms aimed at building a more agile, performance-driven budgeting process.
As Dr. Yakubu puts it, the real issue is not the coexistence of multiple budgets, but how well they are coordinated and how transparently they are executed. Nigeria, he said, is implementing the 2025 budget in earnest while responsibly managing the closeout of obligations from the 2024 fiscal year and its supplementary provisions.
Far from being a crisis, the situation demonstrates the institutional flexibility required to manage a dynamic and evolving national economy.
In the end, what may look like fiscal complexity is in fact a necessary feature of a reforming system—one that is working to balance long-term development goals with short-term realities.