- Budget Size: The Federal Executive Council (FEC) has approved a proposed budget of N47.9 trillion for the 2025 fiscal year, which represents a 35% increase .
- Key Assumptions: The budget is based on a crude oil price benchmark of $75 per barrel, an exchange rate of N1,400 to the dollar, and a GDP growth target of 4.6% .
- Borrowing Plan: The government plans to borrow N9.22 trillion to finance the budget, which has raised concerns about fiscal sustainability .
- Economic Projections: The budget projects confidence, but many Nigerians are skeptical due to soaring prices and economic hardship .
- Expert Concerns: Economists have challenged the optimism surrounding the budget, citing unrealistic oil price benchmarks and the need for fiscal flexibility .
- Priorities: The budget must prioritize sectors that create jobs, reduce poverty, and support youth programs to deliver tangible benefits to the masses .
Nigeria’s Federal Executive Council (FEC) has approved a whopping N47.9 trillion budget proposal for the 2025 fiscal year, with a borrowing plan of N13.8 trillion. This was disclosed by the Minister of Budget and Economic Planning, Atiku Bagudu, after the FEC meeting presided over by President Bola Tinubu.
The budget is part of the Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper for 2025-2027, which will be submitted to the National Assembly for approval. Some key parameters guiding the 2025 budget include a projected GDP growth rate of 4.6%, an oil price benchmark of $75 per barrel, and an exchange rate of N1,400 to $1. The government also expects oil production to hit 2.06 million barrels per day.
However, experts have raised concerns about the budget assumptions, describing them as too aggressive. They argue that the oil production benchmark and GDP growth rate projections may be unrealistic, considering the current economic climate. Additionally, the proposed budget includes N9.22 trillion in new borrowing, which raises concerns about fiscal sustainability.
Key Budget Parameters:
- GDP Growth Rate: 4.6%
- Oil Price Benchmark: $75 per barrel
- Exchange Rate: N1,400 to $1
- Oil Production: 2.06 million barrels per day
- Borrowing Plan: N13.8 trillion
Expert Concerns:
- Unrealistic oil production and GDP growth rate projections
- Inadequate consideration of inflation and currency pressures
- Over-reliance on crude oil-driven economy
- Potential downside risks from increased US oil production
It’s worth noting that the federal government aims to pass the 2025 budget into law before December 2024, to create a predictable fiscal environment and adhere to the January-December budget cycle .
