PRESIDENT Bola Tinubu on Wednesday, December 18 presented Nigeria’s 2025 budget to a joint session of the National Assembly with key highlights, adjusting the exchange rate benchmark to N1,500 per dollar.
Christened ‘Budget of Restoration: Securing Peace, Rebuilding Prosperity,’ Tinubu presented a budget size of N47.9 trillion to the chambers.
He said the 2025 budget sought to consolidate the key policies his administration had instituted to restructure Nigeria’s economy and boost human capital development, increase the volume of trade and investments, bolster oil and gas production, get the manufacturing sector humming and ultimately increase the competitiveness of the country’s economy.
In the medium-term expenditure framework (MTEF) and fiscal strategy paper (FSP) for 2025-2027 passed by the National Assembly on November 30, Tinubu has presented an exchange rate pegged at N1,400 to the dollar for the three years, The ICIR reported.
2025 budget targets
- N34.82 trillion in revenue, a government expenditure of N47.90 trillion, resulting in an N13.08 trillion deficit or 3.89 per cent of Nigerian gross domestic product (GDP), and N15.81 trillion in debt servicing.
- Crude oil production assumption at 2.06 million barrels per day (mbpd).
- Inflation is to drop from 34.6 per cent to 15 per cent by 2025, with the naira-dollar exchange rate improving from N1,700 to N1,500 per dollar.
- N4.91 trillion allocation for defence and security, N4.06 trillion for infrastructure, N2.48 trillion for health, and N3.52 trillion for education.
The President hinted that education infrastructure is to receive N826.90 billion, including provisions for nine new institutions while in health, N402 billion will go towards infrastructure, with N282.65 billion allocated to the Basic Health Care Fund.
“This is an ambitious but necessary budget to secure our future,” Tinubu said, believing that the 2025 budget will help to achieve the restoration of macroeconomic stability and enhance the business environment.
Also, it will foster inclusive growth, employment, and poverty reduction and promote equitable income distribution and human capital development.
According to the President, all the projections are based on the observations of red
uced importation of petroleum products alongside increased export of finished petroleum products, bumper harvests, driven by enhanced security, reduced reliance on food imports and increased foreign exchange inflows through Foreign Portfolio Investments.
It is also based on higher crude oil output and exports, coupled with a substantial reduction in upstream oil and gas production costs.
“We have significantly increased funding for the military, paramilitary, and police forces to secure the nation, protect our borders, and consolidate government control over every inch of our national territory.
“The government will continue to provide our security forces with the modern tools and technology they need to keep us safe. Boosting the morale of our men and women in the armed forces will remain our government’s top priority,” Tinubu stressed.
However, a development economist, Kalu Aja, commenting on the budget said, “The 2025 budget, I title it ‘Borrow $ [dollar] to spend on salaries and debt service and pray oil exports to increase.’
“The only savour I see is the Dangote Refinery (if Malta Blending agrees).”
The speaker of the House of Representatives, Tajudeen Abbas, said Tinubu took bold and decisive steps at removing fuel subsidies, unifying foreign exchange rates, and introducing innovative economic policies to reform the country’s economy.
He, however, said the country’s fiscal realities warrant critical reflection.
2024 budget performance
Meanwhile, Tinubu asserted that 2024 achieved N14.55 trillion in revenue, meeting 75 per cent of his administration’s target, and N21.60 trillion in expenditure, representing 85 per cent of the target as of the third quarter.
“While challenges persist, we improved revenue collection and fulfilled key obligations. The transformational effects of this on our economy are gradually being felt,” he added.