The Nigerian Senate has officially approved the 2025–2027 Medium-Term Expenditure Framework and Fiscal Strategy Paper (MTEF-FSP), setting the stage for a N47.9 trillion budget proposal for 2025.
According to a report by NTA, the proposed budget includes N16.4 trillion allocated to capital projects, while N14.2 trillion is earmarked for recurrent expenditure.
This 2025–2027 MTEF-FSP serves as a guide for budgeting and economic planning over the next three years. By approving it, the Senate has agreed to the fiscal and economic assumptions within the framework. The nation’s budget is predicated on this framework.
Key economic assumptions such as oil benchmark price, daily crude oil production, GDP growth, and an exchange rate projection of N1,400/$1 were also approved.
This move follows a comprehensive review of the framework, which serves as a guide for the nation’s fiscal and economic strategy over the next three years.
Details of the Senate’s approval
The Senate’s decision on the framework includes several key financial allocations. A total of N16.4 trillion has been earmarked for capital projects, while N14.2 trillion is allocated to recurrent expenditure.
The Senate also approved a N9.22 trillion borrowing plan, covering both domestic and foreign borrowings.
Additionally, the N15.38 trillion set aside for debt servicing and N1.44 trillion for pensions and retirees’ benefits reflect the government’s priority on fiscal stability and social security.
Economic assumptions and projections
Several economic assumptions were also approved as part of the framework:
- Oil Benchmark: The oil benchmark prices were set at USD 75 per barrel for 2025, USD 76.2 per barrel for 2026, and USD 75.3 per barrel for 2027.
- Crude Oil Production: Daily oil production is projected at 2.06 million barrels per day in 2025, with increases in subsequent years, reaching 2.35 million barrels per day by 2027.
- Exchange Rate: An exchange rate of N1,400 to USD1 was agreed upon, despite ongoing concerns about the prevailing market rate of N1,700 to USD1.
What you should know
The passage of the framework was part of the president’s request to the lawmakers at previous proceedings.
He also asked the House of Representatives to approve the implementation of a new external borrowing of $2.209 billion in the 2024 Appropriation Act, as well as the National Social Investment Program Agency Establishment Amendment Bill 2024.
- The approved figures, including capital expenditure, oil prices, and debt servicing, highlight the government’s focus on infrastructure development and fiscal discipline. Furthermore, the projected GDP growth rates of 4.6% for 2025, 4.4% for 2026, and 5.5% for 2027 underscore efforts to drive economic growth.
- On November 19, 2024, the House of Representatives approved the 2025–2027 Medium-Term Expenditure Framework and Fiscal Strategy Paper, paving the way for President Bola Tinubu’s N47.9 trillion budget proposal for 2025.
- The president had earlier transmitted the MTEF/FSP to the National Assembly following its approval by the Federal Executive Council.
- Tinubu confirmed that the MTEF/FSP had been approved during a Federal Executive Council meeting held on November 14, 2024.
- He explained that the 2025 budget was crafted based on the fiscal parameters and assumptions outlined in the approved MTEF/FSP.
