President Bola Tinubu has submitted the 2025-2027 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) to the National Assembly, seeking their approval for a proposed budget plan that reflects the administration’s fiscal strategy for the next three years.
The proposed budget for the 2025 fiscal year amounts to N47.9 trillion, marking a significant increase of 35% over the N35.5 trillion allocated in 2024. This increase underscores the government’s commitment to addressing key areas of development and responding to economic challenges.
The breakdown of the proposed budget includes N9.92 trillion for non-debt recurrent expenditures, which will cover essential government operating costs, and N7.72 trillion for capital projects aimed at strengthening infrastructure and supporting economic growth. Additionally, N8.25 trillion has been earmarked for debt servicing, reflecting the government’s commitment to honoring financial obligations. Statutory transfers amount to N1.37 trillion, while a sinking fund of N243.66 billion has been included to manage maturing loans.
Key economic assumptions for the budget include a projected gross domestic product (GDP) growth rate of 4.6%, an oil price benchmark of $75 per barrel, and an exchange rate of N1,400 to the U.S. dollar. Oil production is projected at 2.06 million barrels per day, reflecting efforts to maintain and potentially increase production capacity.
Following the proposal’s approval by the Federal Executive Council (FEC) in a session led by President Tinubu, the Minister of Budget and Economic Planning, Atiku Bagudu, provided further insights into the framework. Bagudu outlined key economic parameters, including the 2025 oil price benchmark, the projected oil production rate, the exchange rate, and the GDP growth target. He emphasized the government’s approach to fiscal responsibility, noting that conservative estimates were used to ensure stability while allowing for flexibility in case of favorable economic conditions.
The federal government’s budget estimate for 2025 includes an anticipated borrowing of N13.8 trillion, equating to 3.87% of the projected GDP, aimed at addressing the budget deficit. Notably, this budget incorporates funding allocations for development commissions recently enacted or under consideration by the National Assembly.
The MTEF also highlights the government’s commitment to sustaining reforms such as market deregulation for petroleum products and foreign exchange. Bagudu emphasized the administration’s intent to urge the Nigerian National Petroleum Corporation Limited (NNPC) to reduce oil and gas production costs significantly. Furthermore, he suggested the need to revisit certain sections of the Petroleum Industry Act of 2021 to manage potential risks to the Federation’s revenue base effectively.