The Federal Executive Council (FEC) has approved the Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) for 2025–2027, proposing a budget of N47.9 trillion for 2025.
The framework includes a borrowing plan of N9.22 trillion to address the projected budget deficit, according to the Minister of Budget and Economic Planning, Abubakar Bagudu.
Bagudu briefed journalists at the State House, Abuja, following the FEC meeting, noting that the MTEF is a crucial fiscal planning document that outlines Nigeria’s macroeconomic assumptions and targets for the next three years. Key parameters for 2025 include an oil price benchmark of $75 per barrel, an oil production target of 2.06 million barrels per day, an exchange rate of N1,400 to the dollar, and a GDP growth rate of 4.6 per cent.
“The 2025 budget estimate of N47.9 trillion reflects borrowing of N13.8 trillion, which is 3.87 per cent of the projected GDP,” Bagudu stated. He also highlighted the need for continued deregulation of petroleum prices and exchange rates, as well as efforts to lower production costs in the oil and gas sector.
The approval of the MTEF precedes the formal submission of the 2025 Appropriation Bill to the National Assembly, a step expected to be completed by Monday, November 18, 2024. The Minister affirmed the government’s commitment to maintaining the January-December budget implementation cycle despite delays.
Bagudu also provided insights into the economic outlook and priorities outlined in the MTEF, which acknowledges Nigeria’s positive growth trajectory amid global economic challenges. The economy recorded a 3.19 per cent real GDP growth in Q2 2024. However, he stressed the need to tackle inflation, improve the business environment, support vulnerable populations, and invest in high-employment sectors.
Reviewing the performance of the 2024 budget, Bagudu disclosed that N16.98 trillion had been spent as of August 2024, against a prorated target of N23.37 trillion. Of this, N7.41 trillion was allocated to debt servicing, N3.7 trillion to personnel costs, and N3.65 trillion to capital projects. He noted that delays in capital releases were partly due to capacity-building requirements for new upload procedures.
Bagudu expressed optimism about smooth collaboration with the National Assembly for the swift approval of the MTEF and the subsequent preparation of the 2025 budget. He credited the transparent relationship between President Bola Tinubu’s administration and the National Assembly for fostering mutual understanding.
The MTEF submission, a statutory requirement under the Fiscal Responsibility Act 2007, underscores the government’s fiscal strategies and economic objectives, aimed at enhancing revenue collection, sustaining expenditure management, and fostering economic resilience.
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