The Federal Government, on Thursday, approved the Medium-Term Expenditure Framework (MTEF) for 2025–2027, alongside the Fiscal Strategy Paper (FSP). According to the framework, the proposed 2025 budget size is ₦47.9 trillion, with new borrowings of ₦9.22 trillion to finance the deficit.
Minister of Budget and Economic Planning, Abubakar Bagudu, announced the development after the Federal Executive Council (FEC) meeting held at the Aso Rock Villa in Abuja.
“The Federal Executive Council approved a memorandum by the Ministry of Budget and Economic Planning, presented by the Director-General of the Budget Office, Mr. Tanimu Yakubu, on the MTEF and Fiscal Strategy Paper for 2025–2027,” Bagudu disclosed.
The MTEF, a critical fiscal tool, establishes macroeconomic assumptions and targets for three years, guiding the national budget. For 2025, the framework outlines key parameters, including:
- Oil price benchmark: $75 per barrel
- Oil production target: 2.06 million barrels per day
- Exchange rate: ₦1,400 to the US dollar
- GDP growth rate: 4.6%
Budget Details
The aggregate expenditure for 2025 is estimated at ₦47.9 trillion, with planned borrowings of ₦13.8 trillion, representing 3.87% of the estimated GDP. Bagudu emphasized the need to sustain petroleum price and exchange rate deregulation, reduce production costs in the oil sector, and possibly amend the Petroleum Industry Act, 2021, to mitigate risks to national revenue.
He clarified that while projections for 2026 and 2027 are included in the MTEF, they feature differing oil price benchmarks.
Economic Context
The minister noted that despite global economic challenges, Nigeria’s economy is on a positive trajectory. The second quarter of 2024 saw a 3.19% growth in real GDP, marking two consecutive quarters of positive growth. However, Bagudu acknowledged the persistent challenges of inflation, economic vulnerability, and the need to support key sectors and social investment programmes.
The framework also reviewed the performance of the 2024 budget. As of August 2024, actual spending stood at ₦16.98 trillion, compared to the prorated target of ₦23.37 trillion. Debt servicing accounted for ₦7.41 trillion, personnel costs (including pensions) ₦3.7 trillion, and ₦3.65 trillion was released for capital projects.
Legislative Timeline
Bagudu revealed that the MTEF would be submitted to the National Assembly on Friday, November 15, or Monday, November 18, at the latest. He assured that despite delays in its approval, the Federal Government would adhere to the January–December budget cycle.
“We are confident because of the transparent relationship between Mr. President and the National Assembly leadership. His team, led by the Coordinating Minister of the Economy, has been mandated to engage with the National Assembly to expedite consideration and approval,” Bagudu stated.
Once approved, the MTEF will pave the way for the finalization and presentation of the 2025 Appropriation Bill by President Bola Tinubu. This will mark Tinubu’s second budget presentation since assuming office in May 2023.
