The Institute of Economic Policy is cautioning against the heavy reliance of the 2025 Budget on social interventions.
According to the institute, this approach may have both positive and negative consequences.
In its critique of the 2025 Budget, the IEA stated that it is prudent to invest more of the country’s resources today to generate a larger national income, which can then be shared equitably.
However, it warned, “if we place equity first, we may likely end up with a smaller national income to share in the future.”
While maintaining the free Senior High School benefits, free nursing trainee allowance, free teacher training allowance, free Livelihood Empowerment Against Poverty (LEAP), and free National Health Insurance Scheme (NHIS), the 2025 Budget also proposes free first-year university fees, free primary health care, and free sanitary pads for schoolgirls, among others.
The IEA acknowledged that these social benefits are economically and socially beneficial. However, it cautioned that they place a substantial burden on the budget, leaving limited room for more productive investments.
It further noted that because the budget is dominated by employee compensation and free benefits, the investment spending component is severely constrained—an issue that, in its view, hinders economic growth.
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