The Nigerian Senate has approved the 2025–2027 Medium-Term Expenditure Framework and Fiscal Strategy Paper (MTEF-FSP) submitted by the Federal Government, setting the tone 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.
Details of the 2025–2027 MTEF/FSP
The MTEF/FSP outlines several critical fiscal targets and projections for Nigeria’s economic management:
- The Senate approved a borrowing plan of N9.22 trillion, which includes both domestic and foreign borrowings.
- The framework sets oil benchmark prices at USD75 per barrel for 2025, USD76.2 per barrel for 2026, and USD75.3 per barrel for 2027.
- Projections for daily oil production are set at 2.06 million barrels per day in 2025, 2.10 million barrels per day in 2026, and 2.35 million barrels per day in 2027.
- The Senate approved an exchange rate of N1,400 to a dollar, despite concerns over the current market rate of N1,700 to a dollar.
- A significant N15.38 trillion is earmarked for debt servicing, while pensions and retirees’ benefits are projected at N1.44 trillion.
Projections and economic assumptions
The 2025–2027 Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP), approved by the upper chamber, projects a GDP growth rate of 4.6% in 2025, 4.4% in 2026, and 5.5% in 2027.
The framework allocates N16.48 trillion for capital expenditure, excluding statutory transfers. It also sets statutory transfers at N4.26 trillion, while recurrent expenditure, excluding debt servicing, is projected at N14.21 trillion.
What you should know
- On 19th November 2024, the House of Representatives approved the 2025–2027 Medium-Term Expenditure Framework and Fiscal Strategy Paper, clearing the way for President Bola Tinubu’s N47.9 trillion 2025 budget proposal.
- On Tuesday, November 19, 2024, Tinubu transmitted the MTEF/FSP to the National Assembly for consideration, following the approval of the Federal Executive Council.
- The president stated that the 2025-2027 MTEF/FSP was approved at the Federal Executive Council meeting on November 14, 2024.
- He explained that the Nigerian Federal government’s 2025 budget was prepared based on the parameters and fiscal assumptions outlined in the approved MTEF/FSP.
