The Federal Executive Council (FEC) has approved the budget for 2025, setting the expenditure at a massive N47.96 trillion.
This figure represents a significant 36.8% increase compared to the 2024 budget, signaling an ambitious financial outlook for the coming year.
The approval took place during the final FEC meeting of 2024, which was held on Monday at the State House in Abuja.
Minister of Budget and Economic Planning, Atiku Bagudu, addressed journalists after the meeting, highlighting key economic assumptions underlying the proposed budget framework.
According to Bagudu, the 2025 budget is based on an oil price benchmark of $75 per barrel.
The budget also assumes a daily oil production estimate of 2.06 million barrels and a projected exchange rate of N1,400 to the dollar.
The government projects a total revenue of N34.82 trillion for 2025, but with an expected budget deficit of N13.13 trillion.
This deficit is about 3.89% of Nigeria’s Gross Domestic Product (GDP), raising concerns about the country’s fiscal health in the years ahead.
Bagudu explained that the budget framework also includes amendments recommended by President Bola Ahmed Tinubu.
“The 2025 framework is based on oil price benchmark of $75 per barrel, oil production of 2.06 million barrels per day, and exchange rate of N1,400 to the dollar,” Bagudu said.
“These are already included in the medium-term expenditure framework which we have presented here, and which has also been approved by the National Assembly,” he added.
The approval of such a large budget comes with its own set of challenges.
Given the projected deficit, the government will need to raise additional revenue, possibly through borrowing or alternative fiscal measures.
This increase in expenditure is expected to put pressure on the national economy, particularly as Nigeria continues to struggle with fluctuating oil prices and an unstable exchange rate.
The 2025 budget will be the first full budget under President Tinubu’s administration, making it a critical test for his economic agenda.
However, there may be delays in the official presentation of the 2025 Appropriation Bill to the National Assembly.
Minister of Information and National Orientation, Mohammed Idris, revealed that ongoing discussions could lead to a postponement of the budget presentation.
Initially, it was expected that President Tinubu would present the budget on Tuesday.
But Idris indicated that the presentation could now happen on Wednesday instead.
The decision to delay the presentation follows concerns about the final details of the budget framework and the scheduling of the necessary parliamentary procedures.
Senator Godswill Akpabio, President of the Senate, had previously announced that the President would present the budget on Tuesday.
But given the uncertainty, Idris mentioned that the discussions are ongoing and that the final date would be confirmed soon.
Despite the potential delay, the approval of the N47.96 trillion budget by the FEC marks a significant step forward for Nigeria’s fiscal planning.
This new budget comes at a time when global oil prices are unpredictable, and Nigeria’s economy is in the midst of major reforms.
The challenge for the government will be to manage this ambitious budget within the constraints of limited revenue and growing debt levels.
In the face of a large deficit, critics may raise questions about how the government plans to finance the gap.
Many are concerned that such a large budget deficit could lead to further borrowing or even inflationary pressures on the economy.
Despite these concerns, the government has emphasized its focus on increasing revenue through various means, including improved oil production and better management of resources.
The 2025 budget, once presented to the National Assembly, will undergo further scrutiny and debate before being officially passed into law.
As Nigeria’s economic situation continues to evolve, much will depend on how effectively the government can balance expenditure with revenue generation.
This budget, with its bold projections and high expenditure, will likely play a key role in shaping the country’s financial landscape for years to come.
