On Wednesday, the House of Representatives approved the 2025-2027 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP), which were submitted by President Bola Ahmed Tinubu. This significant step by the National Assembly lays the groundwork for the president’s forthcoming presentation of the 2025 budget, as reported by Daily Trust.
The MTEF/FSP plays a crucial role in outlining the key parameters necessary for formulating the annual budget. These parameters include projections for the exchange rate, oil benchmark prices, and inflation rates, all of which are vital for effective fiscal planning.
Following a thorough clause-by-clause examination, the approval came from the Committee of the Whole after the Committees on Finance, National Planning, and Economic Development presented their findings during plenary. This meticulous review process ensures that all aspects of the framework are considered before approval.
Among the key parameters approved in the MTEF/FSP are the projected oil benchmark prices, which are set at $75, $76.2, and $75.3 per barrel for the years 2025, 2026, and 2027, respectively. Additionally, the House has established a projected exchange rate of N1400/USD for these years, alongside inflation rate forecasts of 15.75%, 14.21%, and 10.04% for 2025, 2026, and 2027.
In anticipation of increased domestic crude oil production, the daily oil production forecast has been raised from 1.78 million barrels to 2.06 mbpd for 2025, 2.10 mbpd for 2026, and 2.35 mbpd for 2027. This adjustment reflects a positive outlook on oil production capabilities in the coming years.
The projected GDP growth rates are also notable, with estimates of 4.6%, 4.4%, and 5.5% for the years 2025, 2026, and 2027, respectively. These growth projections indicate an optimistic economic trajectory, which is essential for planning future expenditures and investments.
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For the 2025 budget, a proposed total of N47.9 trillion has been outlined, excluding transfers. Within this budget, N15.38 trillion is earmarked for debt service, while N16.48 trillion is allocated for capital expenditure. Additionally, a fiscal deficit of NGN13.08 trillion is anticipated.
The report further elaborates that, according to the framework’s overview of revenues and expenditures, the proposed spending for the 2025 budget stands at NGN47.9 trillion, of which NGN34.82 trillion will be retained. This structured approach to budgeting aims to ensure fiscal responsibility and sustainable economic growth.
