Business
RMAFC Faults Nigeria’s Budgeting Processes, Practices
The Chairman, Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), Mr Hamman Tukur has faulted the current budgeting processes and practices in the country.
Tukur said this in his presentation at the 12th Annual Tax Conference of the Chartered Institute of Taxation of Nigeria (CITN) in Abuja on Friday.
He said that the faulty processes had contributed to the under-development of the country as well as its economic woes over the years.
Tukur said it had become necessary to review the budgeting procedures and practices in order to achieve efficiency in both the preparation and implementation of budgets for the overall accelerated development of the economy and the nation at large.
According to him, any keen observer of the budgeting practices by all tiers of government from 1999 to date will have been concerned by certain practices and procedures.
The chairman also blame the recurring disputes between the legislative and the executive arm of government in respect of preparation, approval and implementation of annual budgets on faulty processes.
Tukur noted that “the critical issue is that these practices, procedures and disputes have impacted negatively on the country’s economy.
“For too long, the abundance of natural resources in the country rather than being used to stimulate growth and development, have not only become a source of economic instability but have also resulted in mismanagement and corruption.
“Today, Nigeria cannot match its pace of growth and development with that of Botswana which has used its natural wealth to help diversify the economy and invest through prioritised budgetary sectoral allocation in health, education, agriculture and solid minerals.”
Tukur expressed worry that in spite of our penchant for well articulated budgetary ideas and the huge amount of financial outlay, the country’s budget implementation had been a record of intangible performance and waste of resources.
He said that a good budget must have realistic revenue projections, linkage of resource availability with expenditure plans, focus on project priorities and time frame, such as short term, medium term, long term and rolling.
Tukur said that the success of any budget and its subsequent implementation depended largely on adequate consultations, discussions and cooperation between the two arms of government, the executive and the legislature.
He said in Nigeria, the expected executive-legislative understanding and linkage was lacking and as a result, most Nigerians believed that the dividends of budgeting might take a long time to be felt by the citizenry.
This, he said, was due to the numerous controversies and impasse that had trailed federal and state budgets under the democratic dispensation.
Canvassing the adoption of international best practices in the budgeting processes, Tukur said some practices must be discontinued as the two arms of government must work in harmony in accordance with constitutional provisions.
He said there should be an enactment of a budget law that would clearly set the time frame for each process and stage of the budgeting process.
Such law, Tukur said, would equally define the roles of stakeholders to the budgeting process.
He said that government at all levels should endeavour to prepare budgets that were realistic, concise, achievable and implementable based on well projected revenue estimates for the fiscal year.
The Central Bank of Nigeria (CBN) yesterday said 33 banks have met new minimum capital requirements under its recapitalisation programme, raising a combined N4.65 trillion to strengthen the financial system.
The apex bank disclosed this in a statement marking the end of the exercise, which commenced in March 2024 and drew participation from domestic and foreign investors.
The statement was jointly signed by the Director of Banking Supervision, Olubukola Akinwunmi, and the Acting Director of Corporate Communications, Hakama Sidi-Ali.
The statement said “Over the 24-month period, Nigerian banks raised a total of N4.65tn in new capital, strengthening the resilience of the financial system and enhancing its capacity to support the economy.”
The regulator said local investors accounted for 72.55 per cent of the funds, while international investors contributed 27.45 per cent, reflecting continued confidence in the sector.
Commenting on the outcome, the CBN Governor, Olayemi Cardoso, said in the statement, “The recapitalisation programme has strengthened the capital base of Nigerian banks, reinforcing the resilience of the financial system and ensuring it is well-positioned to support economic growth and withstand domestic and external shocks.”
It added that while 33 banks have complied with the new thresholds, a few others are still undergoing regulatory and legal processes.
The statement noted, “The CBN confirms that 33 banks have met the revised minimum capital requirements established under the programme.
“A limited number of institutions remain subject to ongoing regulatory and judicial processes, which are being addressed through established supervisory and legal frameworks.
“All banks remain fully operational, ensuring continued access to banking services for customers.”
The apex bank stressed that the exercise was executed without disrupting banking operations, ensuring uninterrupted access to services nationwide.
It further stated that key prudential indicators have improved, particularly capital adequacy ratios, which remain above global Basel benchmarks.
The minimum ratios were set at 10 per cent for regional and national banks and 15 per cent for banks with international licences.
The bank also said the recapitalisation coincided with a gradual exit from regulatory forbearance, a move it said improved asset quality, strengthened balance sheet transparency, and enhanced overall stability.
To preserve these gains, the CBN said it has reinforced its risk-based supervision framework, mandating periodic stress tests and adequate capital buffers for banks.
It added that supervisory and prudential guidelines would be reviewed regularly to strengthen governance, risk management, and resilience across the sector.
“The successful completion of the programme establishes a stronger and more resilient banking system, better positioned to support lending, mobilise savings, and withstand domestic and global shocks,” the statement said.
The Tide learnt that foreign capital inflows into Nigeria’s banking sector rose by 93.25 per cent year-on-year to $13.53bn in 2025, up from $7.00bn recorded in 2024, amid the ongoing recapitalisation drive by the Central Bank of Nigeria.
Data from the National Bureau of Statistics capital importation report showed that the banking sector remained the dominant destination for foreign capital, accounting for $13.53bn of the total $23.22bn recorded in 2025, representing 58.26 per cent of total inflows, up from 56.81 per cent in 2024.
The surge reflects heightened investor interest in Nigerian banks as they raised fresh capital to meet new regulatory thresholds introduced by the apex bank, with industry-wide recapitalisation activities driving large-scale inflows across all quarters of the year.
However, the Centre for the Promotion of Private Enterprise (CPPE) recently raised concerns over weak credit flows to small businesses despite recent banking sector reforms.
The CPPE, led by a renowned economist, Dr Muda Yusuf, acknowledged that the ongoing bank recapitalisation exercise by the CBN has strengthened the financial system, but warned that the benefits have yet to translate into meaningful support for the real economy.
The facility will be disbursed through participating Microfinance Institutions (MFIs), which will in turn extend the loans to their customers, particularly SMEs, as they directly interface with businesses at the grassroots level.
The Executive Director of COMCIN, Mr. Micheal Ogbaa who represented the Chairman, Dr. Iredele Oyedele (FCA, FCCA), said the initiative is designed to strengthen micro-lending institutions and expand access to finance for grassroots entrepreneurs, particularly women and youths in the informal sector.
Ogbaa explained that COMCIN does not lend directly to individuals but works through its network of microfinance and cooperative institutions, which in turn provide loans to end users.
“We came together to advocate for the microfinance ecosystem. Commercial banks often exclude people at the grassroots, but our members are positioned to reach them. This facility will empower them to do more,” he said.
He noted that the loan scheme offers low interest rates and flexible repayment plans, making it more accessible to small business owners.
According to him, about 90 percent of beneficiaries are expected to be women, who play a key role in sustaining families and driving economic activities at the local level.
“Our focus is on traders, service providers, and players in the informal sector. These are the real movers of the economy. By supporting them, we are strengthening families and contributing to national development,” he added.
Ogbaa disclosed that eligible SMEs with proven integrity and business track records could access up to N5 million each through participating micro-lending institutions. The rollout has commenced in Lagos and will extend to Abuja, Enugu, and other regions, including the South-West, South-East, and North-East.
He said 12 micro-lending institutions have already benefited from the scheme, while 85 applications are currently being processed under the pilot phase.
“Our target is to reach at least 100,000 SMEs nationwide. We are building a platform that connects funding partners with credible micro-lending institutions, creating a reliable channel for financial inclusion,” Ogbaa said.
He added that COMCIN is also working to attract larger funding pools from development finance institutions and private investors, noting that successful implementation of the pilot phase would boost confidence and unlock more capital for SMEs.
“We have seen encouraging testimonies from early beneficiaries. As we demonstrate transparency and efficiency, more institutions will be willing to channel funds through us,” he said.
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