The Nigerian Senate approved the 2025-2027 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP), which outlines a comprehensive three-year spending plan for the federal government.
This framework is crucial as it serves as the foundation for the nation's budget, providing a roadmap for managing public finances over the medium term. The approval includes a significant new borrowing plan amounting to ₦9.22 trillion, encompassing both domestic and foreign borrowings.
The MTEF-FSP sets several key economic projections and benchmarks. The exchange rate is projected at ₦1,400 to a dollar, with oil prices set at $75, $76.2, and $75.3 per barrel for the years 2025, 2026, and 2027, respectively. Daily oil production is anticipated to increase significantly, with targets of 2.06 million, 2.10 million, and 2.35 million barrels per day over the same period. These figures are critical as they influence revenue projections and fiscal strategies.
The framework also projects GDP growth rates of 4.6%, 4.4%, and 5.5% for 2025, 2026, and 2027, respectively. Inflation rates are expected to decrease from 15.75% in 2025 to 10.04% by 2027. The total proposed spending for the federal government stands at ₦47.9 trillion, with capital expenditure projected at ₦16.48 trillion, excluding transfers. Statutory transfers are estimated at ₦4.26 trillion, while the sinking fund is projected at ₦430.27 billion. Total recurrent (non-debt) expenditure is projected at ₦14.21 trillion.
Debt service is valued at ₦15.38 trillion, with pensions, gratuities, and retirees' benefits at ₦1.443 trillion. The fiscal deficit is projected at ₦13.08 trillion. The Senate's approval followed a report presented by Senator Sani Musa, Chairman of the Senate Committee on Finance, during a plenary session.
Additionally, the Senate has tasked its Committees on Finance and Petroleum, as well as Gas, to investigate allegations against the Nigerian National Petroleum Corporation Limited (NNPCL). Reports suggest that NNPCL withheld about ₦8.48 trillion in petrol subsidies and failed to remit $2 billion (₦3.6 trillion) in taxes. These investigations aim to enhance transparency, accountability, and optimize revenue generation for the nation.
Overall, the 2025-2027 MTEF-FSP aims to provide a structured approach to government spending, ensuring better resource allocation and informed budgeting decisions across various ministries and departments.
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