President Bola Tinubu is expected to present the 2025 budget to the National Assembly on Friday (today).
The Tinubu-led Federal Government on Thursday approved the Medium-Term Expenditure Framework for 2025–2027 and Fiscal Strategy Paper.
According to the MTEF, the planned 2025 budget size is N47.9 trillion, with fresh borrowings of N9.22 trillion, the Minister of Budget and Economic Planning, Abubakar Bagudu, informed State House correspondents during this week’s Federal Executive Council meeting at Aso Rock Villa in Abuja.
Bagudu announced, “The Federal Executive Council approved a memorandum by the Ministry of Budget and Economic Planning, which was presented by the Director-General of the Budget Office [Mr. Tanimu Yakubu] on the Medium-Term Expenditure Framework and Fiscal Strategy Paper for 2025–2027.”
The announcement follows weeks of delay as President Bola Tinubu prepares to introduce the 2025 Appropriation Bill to the National Assembly, his second after taking office in May 2023.
The MTEF is an important tool used by the FG to explain its three-year fiscal policy. It establishes macroeconomic assumptions and targets that influence national budgeting.
It also provides forecasts for major economic indicators like oil prices, exchange rates, inflation, and growth rates.
The MTEF establishes criteria for the period 2025-2027, including 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 US dollar, and a 4.6 percent GDP growth rate.
The FG’s anticipated aggregate expenditure for 2025 is N47.9 trillion, with a planned borrowing of N13.8 trillion, or 3.87 percent of GDP.
The minister explained, “For the 2025-2027 period, the MTEF sets out parameters including an oil price benchmark of $75 per barrel for 2025, oil production of 2.06 million barrels a day, as well as an exchange rate of N1400 to the dollar and GDP growth of 4.6 percent.
“It is expected that for 2025, the Federal Government’s budget estimate, the aggregate expenditure is estimated at N47tn, and this includes a borrowing of N13.8tn, which is 3.87 percent of the estimated GDP.
“The budget size that was approved for presentation to the National Assembly in the MTEF is N47.9tn with new borrowings of N9.22tn to finance the budget deficit in 2025 as well as noting that we need to sustain the commendable market deregulation of petroleum prices and exchange rate and to compel the Nigerian National Petroleum Corporation Limited to lower its oil and gas production cost significantly, and even to consider the need to amend the relevant sections of the Petroleum Industry Act 2021 to address the significant risk to Federation.”
“The figures were only for 2025, even though there are projections for 2026 and 2027 in the document, which have different figures for the oil price benchmark for the two years,” he added.
Bagudu stated that Thursday’s communication sought the council’s approval of the MTEF for submission to the National Assembly, as required by the Fiscal Responsibility Act 2007.
The MTEF starts with a macroeconomic overview. It emphasises that, despite global economic concerns, the Nigerian economy is on a promising track, with two straight quarters of growth and a 3.19 percent real-term gain in the second quarter of 2024, according to the budget minister.
However, he acknowledged the importance of combating inflation, strengthening economic resilience, assisting vulnerable populations, bolstering high-employment industries, improving the business climate, and effectively implementing youth and social investment programs.
He stated that, in addition to the FSP, the framework contains an evaluation of the 2024 budget execution, emphasising success in revenue collection and expenditure management, despite some targets falling short.
According to Bagudu, the report also demonstrates that non-oil revenue streams operate better than expected.
Speaking on the 2024 budget performance, he said, “Actual spending as of August 2024 ending was N16.98tn as against the prorated spending target of N23.37tn at the end.
“Of this amount, N7.41tn was for debt service and N3.7tn for personnel costs, including pension. Further, N3.65tn has been released for capital projects. Most of the delays for capital project release have been earlier legacy issues, in the sense that the new procedure for upload requires a lot of capacity building and delayed uploads.”
N28.75 trillion was set aside for the 2024 budget. However, it increased to N35.6 trillion after National Assembly amendments added N6.2 trillion to the pile.
Responding to reporters enquiries, the budget minister stated that the MTEF would be presented to the National Assembly on Monday, November 18.
“We are submitting it, I believe, tomorrow [Friday] or, at the latest, on Monday. The office of Mr. President will forward the Medium-Term Expenditure Framework and Fiscal Strategy Paper to the National Assembly,” he stated.
The minister also stated that, despite the late approval for the MTEF, the FG will stick to the January-December budget implementation schedule.
He affirmed, “We are confident because we have built a respectable relationship with the National Assembly. We have narrowed the areas of misunderstanding. And because of that mutual respect, Mr. President is very transparent with the National Assembly leadership. And the National Assembly appreciates that openness.
“He [the President] has instructed all his teams to ensure we cooperate with the National Assembly. For instance, the team led by the Coordinating Minister of the Economy has been mandated not only to wait but also to engage the National Assembly and answer all questions at the committee hearings.
“So, I’m confident because of this combination of factors. With this cooperation, I believe we’ll see an expeditious consideration, and immediately we are aware of the approval, we will finalise the budget because the MTEF precedes the budget preparation.”
