The Federal Government of Nigeria has proposed a budget of N47.9 trillion for 2025. The Federal Executive Council (FEC) approved this budget plan during its meeting on Thursday, November 14, led by President Bola Ahmed Tinubu. The Minister of Budget and Economic Planning, Atiku Bagudu, shared this information with reporters after the meeting.
According to Bagudu, this decision is part of the Medium-Term Expenditure Framework (MTEF) for 2025-2027. The Fiscal Responsibility Act of 2007 outlines how the government should plan and manage its finances over the next few years.
The FEC has set crucial economic indicators to guide the budget. “We have pegged the price of crude oil at $75 and the exchange rate at N1,400 to a dollar,” Bagudu said. The government is projecting oil production to be around 2.06 million barrels daily.
Bagudu mentioned that the government expects a growth rate of 3.19% in the second quarter of 2024. He assured the public that the administration would continue to address inflation, strengthen the economy, and support those in need.
“Our goal is to sustain the commendable market deregulation of petroleum prices and the exchange rate,” he said. He also said it was essential to reduce oil and gas production costs and possibly revisit the Petroleum Industry Act to manage risks better.
The proposed budget includes plans for new borrowings of N9.22 trillion to cover the budget deficit in 2025. Bagudu said, “We aim to ensure that our fiscal efforts remain on track.” He also expressed optimism about progress in revenue collection and managing expenditures despite delays in achieving targeted goals.
In discussing the context of the 2024 budget, the minister added, “The overall trajectory shows that fiscal efforts are progressing well, with key non-oil revenue streams performing better than expected.“
The FEC will soon submit the MTEF to the National Assembly, which is expected to consider it either on November 15 or by Monday, November 18.
Expert Analyze
Regarding the budget’s dollar value, the proposed 2025 budget of N47 trillion is about $27.96 billion, which is lower than last year’s budget of $34 billion. Compared to previous administrations, the current budget is smaller. For example, former President Muhammadu Buhari’s administration had budgets of $35 billion in 2020 and 2021, $41.77 billion in 2022, and $47.39 billion in 2023.
Experts have shared their concerns regarding the budget proposal. An anonymous economist commented, “The 2024 budget has a huge deficit, and the 2025 plan seems too ambitious.” The economist urged the government to carefully review its 2024 budget performance before moving forward. “We have not been meeting revenue targets. How are you going to fund N47 trillion?” they questioned.
The economist also warned that the proposed budget could lead to a larger deficit and contribute to economic instability, ultimately affecting ordinary Nigerians through increased inflation.
They also point to Nigeria’s rising debt profile under President Tinubu as a source of concern, stressing the importance of aligning spending with realistic revenue expectations.
However, the government believes its strategies will support economic growth although mindful of potential financial challenges.
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