Spaghetti economics, tax and budget chaos amid affordability crisis

One joked that Nigeria runs a “spaghetti economic policy” because the administrators of this administration throw a list of policies against the wall and only pick the one that sticks, albeit for the moment.

And to be honest, this is quite worrying given how nonchalant they are in an election year. The way they defend their policy outcomes, given the affordability crisis in the country, is not convincing. In most cases, the conversation ends with divisive insults.

One piece of unsolicited advice is that they need to start aligning their good intentions with reality. This is the last full year of this administration before the election. They have spent enough time to realise that prudence-for-purpose policies will not buy them votes in an economy facing an affordability crisis. This is the year they need to demonstrate to voters that they will have fit-for-purpose policies if re-elected. Of course, they will not heed such advice, because they do not take the voters seriously.

Instead of taking the voters seriously, the administrators keep exposing their economic weaknesses. Many would have thought it was a one-off when the Minister of Finance declared that the 2025 revenue target was not met.

But instead of addressing the issue of revenue seriously, what followed was a series of drama. They went on to sign a controversial tax law amid allegations of forgery. This casts a bigger shadow on the credibility of the government to raise the revenues it projected. As it stands, the guidelines for tax collection remain unclear. The issue has affected the 2026 budget and will continue to affect the economic environment.

As we enter the third month of the year, the proposed 2026 budget expenditure of N58.18 trillion is still under debate in the National Assembly, with revenue being raised at every debate. And one will not be wrong to doubt that the expected revenue of N34.33 trillion will not be met. After all, broken promises have become a habit for this administration.

We all recall how the President went on record at the National Assembly that this year will be the last time they will run several simultaneous budgets. It is expected that all other running budgets will be closed in about 35 days’ time, in March. But as the time approaches, the budget that will replace the other running budgets has yet to be passed. This is not a signal to take the administrators of this administration seriously.

Nigerians are still in awe that the capital expenditure was not disbursed in the previous years. The exposé by the Health Minister that his ministry received N36 million out of the N218 billion appropriated was shocking to the nation. But he was not alone. The Minister of Transport reported getting only one per cent of the total capital expenditure sum appropriated to his ministry. Similarly, Nigerian Bulk Electricity Trading (NBET) reported receiving only N60 million out of the N858 billion appropriated. The list goes on. This newspaper published a front-page report about it, and it is worrying.

We must remember that in 2025, total expenditure was around N55 trillion, with a deficit of N13 trillion. The finance minister has already established that only N10 trillion of the estimated N35 trillion to N40 trillion government revenue was realised. Assuming what was generated was spent on recurrent expenditure and debt servicing (total recurrent spending: N27.96 trillion; of which debt service: N14.4 trillion), this raises the question of what the government was actually spending the trillions it borrowed on.

Surely, this is a sign of why the Nigerian economy is in such a difficult situation. But when anyone points to the poor state of the macroeconomy, the administrators who have turned into sycophants would argue that inflation is down to 15 per cent, the Naira is gaining against the dollar, and the foreign reserve is rising.

This should not be a debate, but if it were, they should be able to tell us how these economic indicators affect the common man who cannot afford food, find a job, travel, go to their farms, or get healthcare. They only make promises for the future. But the people are angry at these empty promises. It is even more annoying when they are reminded that this crisis is caused by this administration, following the fuel subsidy removal and the unification of the foreign exchange rate market.

In saner climes, where economies are run on principles that work for the people, a fall in inflation and currency appreciation in an import-dependent economy will improve citizens’ affordability. But in Nigeria, the affordability crisis keeps persisting. And the reasons why falling inflation and a stronger naira have not restored people’s real purchasing power are right before our eyes.

When this administration announced the removal of the fuel subsidy, prices rose sharply and have remained comparatively high. But people’s income, mainly salaries and wages, has not kept pace with inflation. Many states are not paying the minimum wage, and workers around the country keep getting exploited. We must remember that improvements in living standards depend on real income, not inflation alone.

The foreign exchange is not so different. The recent Naira appreciation against the dollar has nothing to do with Nigeria’s domestic economic reforms. It partly reflects external factors, including periods of US dollar weakness linked to policy uncertainty. Besides, if the fundamentals are right, the CBN would not have reversed its market intervention strategy. It is now making a weekly $15,000 sale to BDC operators, which goes against what they spent years complaining about—defending the Naira. Of course, they reversed the intervention after kicking out around 5000 thriving businesses from the forex market.

Besides, if those economic indicators—lower inflation and appreciating naira—were not artificial, we should have seen prices falling. The outcomes should be heard from citizens and businesses. But what we hear is that Nigerians are unhappy because they are facing a severe, multi-year affordability crisis. And we are in 2026. And rightly so, they are predominantly blaming the administrators of this administration and how they are managing the economy.

Old Adam Smith would say, “No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable.”

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