The Federal Executive Council (FEC) has approved a proposed budget of N47.9 trillion for 2025 under the Medium-Term Expenditure Framework (MTEF) for 2025-2027.
This was disclosed by the Minister of Budget and Economic Planning, Atiku Bagudu, following a meeting chaired by President Bola Ahmed Tinubu. Bagudu emphasized that the framework aligns with the Fiscal Responsibility Act of 2007 and aims to enhance economic resilience, manage inflation, and support vulnerable sectors.
The approved framework sets key assumptions for the 2025 fiscal year, including a crude oil benchmark price of $75 per barrel, an exchange rate of N1,400 to the dollar, and an oil production target of 2.06 million barrels per day.
The budget includes new borrowings of N9.22 trillion to address a projected deficit, with a focus on sustaining market deregulation and potentially amending the Petroleum Industry Act to mitigate risks to the economy.
Bagudu noted that despite revenue collection challenges, non-oil revenue streams have exceeded expectations, with the government planning to strengthen fiscal efforts to boost high-employment sectors, youth development, and social investment programs. The framework will be submitted to the National Assembly for review, along with other pending economic stabilization and tax reform bills.
Economists, however, expressed concerns over the ambitious budget size given Nigeria’s growing debt profile. An anonymous expert cautioned that the 2025 budget could be overreaching, especially as revenue targets for 2024 have not been fully met. The expert highlighted that Nigeria’s debt-to-GDP ratio has already climbed to about 7-8%, surpassing the 3.6% target.
Nigeria’s debt has grown significantly, with data from the Debt Management Office showing an increase from N87.3 trillion in June 2023 to N134.2 trillion by June 2024 under Tinubu’s administration. Analysts argue that deep spending amid low revenue could exacerbate debt and inflation issues.
Another analyst, Daniel Wale, pointed out that while the proposed N47.9 trillion budget translates to roughly $27.96 billion at the current exchange rate, it remains comparable in dollar value to previous budgets. He noted that for a population of over 230 million people, the budget per capita is still relatively low.
The approved MTEF is expected to be presented to the National Assembly by November 18, as part of efforts to stabilize the economy and support growth in key sectors.
