THE Federal Government has adopted the Medium Term Expenditure Framework (MTEF) for 2025-2027, with the proposed budget size of N47.9 trillion for the 2025 fiscal year.
The 2025 budget proposal represents approximately a 37.25 per cent increase from the 2024 total approved budget.
This framework, which includes the Fiscal Strategy Paper, was approved by the Federal Executive Council (FEC) during its weekly meeting in Abuja on Thursday, November 14.
Minister of Budget and Economic Planning, Abubakar Bagudu, disclosed details of the MTEF, noting the government’s intention to finance part of the proposed budget through new borrowings of N9.22 trillion.
This borrowing, according to him, is projected to bridge the anticipated budget deficit and support key government programs aimed at stabilising the economy.
Bagudu said the framework is expected to be presented to the National Assembly by Monday, November 18, 2024, for further review and approval.
“The Federal Executive Council approved a memorandum by the Ministry of Budget and Economic Planning, presented by the Director General of the Budget Office, Tanimu Yakubu, on the Medium Term Expenditure Framework and Fiscal Strategy Paper for 2025-2027.”
The budget parameters set forth in the MTEF include“an oil price benchmark of $75 per barrel for 2025, oil production of 2.06 million barrels per day, an exchange rate of N1400 to $1, and a GDP growth of 4.6 per cent.”
He stressed that the government has forecasted a GDP growth rate of 4.6 per cent for the coming year.
“For 2025, the Federal Government’s budget estimate for aggregate expenditure is N47trillion, including a borrowing of N13.8trillion, which is 3.87 per cent of the estimated GDP.
“This includes projections, with, for the first time, provisions for contributions to the development commissions that have been approved by the National Assembly,” he said.
According to Bagudu, the fiscal strategy is designed to maintain recent progress in market deregulation for petroleum prices and exchange rates, while pushing for cost reductions in oil and gas production by the Nigerian National Petroleum Corporation Limited (NNPCL).
“The budget size approved for presentation to the National Assembly in the MTEF is N47.9tn, with new borrowings of N9.22trillion to finance the budget deficit in 2025. We aim to sustain the commendable market deregulation of petroleum prices and the exchange rate, compel the Nigerian National Petroleum Corporation Limited to significantly lower its oil and gas production costs, and potentially amend relevant sections of the Petroleum Industry Act 2021 to address key risks to the Federation,” Bagudu added.
The minister noted that a review of the 2024 budget implementation shows positive trends in revenue collection and expenditure management, particularly in non-oil revenue streams that have exceeded expectations.
“Despite some lags in prorated targets, the overall trajectory shows that fiscal efforts are on track, with key non-oil streams performing better than anticipated,” he stressed.
On January 1, Tinubu signed N28.7 trillion 2024 appropriation bill into law.
The version of the bill passed by the Senate showed an increase of over N1.2 trillion from the N27.5 trillion proposal that Tinubu laid before the joint sitting of the National Assembly on November 29.
Consequently, The ICIR reported that amid dwindling revenue resources and a huge debt servicing over Nigeria’s rising debt, further Tinubu asked the national assembly to increase the 2024 appropriation act by N6.2 trillion.
The latest request saw the 2024 budget increased to N34.9 trillion from an initial N28. 7 trillion budget Tinubu signed into law on January 1.
Usman Mustapha is a solution journalist with International Centre for Investigative Reporting. You can easily reach him via: umustapha@icirnigeria.com. He tweets @UsmanMustapha_M