A proposed N47.9 trillion budget for the fiscal year 2025 was approved by the Federal Executive Council (FEC) on Thursday.
This amounts to a 35 percent increase over the N35.5 trillion total budget for 2024. The federal government intends to implement an expansionary budget in 2025 in order to help millions of Nigerians escape poverty.
This was revealed by Atiku Bagudu, minister of finance and economic planning, to reporters at the State House following Thursday’s Federal Executive Council (FEC) meeting, which was chaired by President Bola Tinubu.
According to Bagudu, this was in accordance with the Fiscal Responsibility Act (FRA) of 2007 and was a component of the Medium Term Expenditures Framework (MTEF) for 2025–2027.
He further disclosed that, in accordance with the 2007 FRA, the FEC approved the MTEF’s submission to the National Assembly within the coming days.
The framework forecasts a 4.6 percent GDP growth rate, a $75 per barrel price for crude oil, a N1400/dollar exchange rate, and a daily oil production of 2.06 million barrels.
Remember that the federal government provided a budget of N27.5 trillion (or $36.7 billion) in the 2024 “Renewed Hope” budget, with a projected revenue of N18.32 trillion ($24.4 billion) and a deficit of N9.18 trillion ($12.2 billion). Later, the entire budget was raised to N35.5 trillion.
The federal government also predicted oil revenue at N7.68 trillion to meet the projected revenue, with government-owned businesses expected to contribute N4.07 trillion.
N9.92 trillion in non-debt recurring expenses, N7.72 trillion in capital expenditures (excluding transfers), N8.25 trillion in debt servicing, N1.37 trillion in statutory transfers, and N243.66 billion in sinking fund expenses are all included in the projected 2025 budget.
Edun Explains Borrowing Plans
The council also approved a new external borrowing of $2.2 billion, which is composed of $1.7 billion and $500 million in SUKUK financing, according to Wale Edun, minister of finance and coordinating minister of the economy.
Edun claimed that the permission will improve economic reforms and fortify the nation’s finances.
The minister said that he had submitted two memos, one of which was on plans for external borrowing, which, if ultimately accepted by the National Assembly, would allow Nigeria to access the global financial market for a combination of SUKUK and Euro bond financing.
“The first is to complete the federal government’s borrowing program in terms of external borrowing, with the approval of the $2.2 billion financing programme comprised of access to the international capital market for some combination of the Euro bond offer and the Sukuk bond offer – perhaps a Euro bond of about $1.7 billion and Sukuk financing of another $500 million. The actual structure of the finance, which will be determined as soon as the National Assembly considers it.”
Edun claimed that through the domestic issue of dollar bonds, Nigeria’s economy has demonstrated resilience in the financial markets, capacity, and increased complexity, drawing in local investors.
“This being able to access the international capital market is also a sign of the acceptance and the support for the macroeconomic programme of Mr President and indeed his entire administration.”
“So, based on the accomplishments made thus far, we now have a window to access the foreign capital market for up to $2.2 billion in financing. That section of the Nigerian Appropriation Act for 2024 has been changed.”
In order to address Nigeria’s housing shortage of 22 million homes and offer long-term, reasonably priced mortgage financing to Nigerians, he revealed that the council also approved the establishment of a N250 billion real estate investment fund.
With tenors that might last up to 20 years or more, Edun promised that the project would provide Nigerians the chance to get mortgages at interest rates of between 10 and 12 percent, which is much lower than the current market rates, which sometimes surpass 30 percent.
“The Ministry of Finance Incorporated’s (MOFI) real estate investment fund has been approved. This fund will serve as the basis for the revival of long-term mortgage financing in the Nigerian economy.”
“The MOFI Real Estate Investment Fund will initially amount to N250 billion and will provide low-cost, long-term mortgages to Nigerians who wish to acquire homes. It will help to alleviate a portion of the 22 million housing deficit.“
“Of course, it will create jobs, stimulate economic growth, and pave the way for other private sector investors to participate in the housing construction industry, with significant benefits for the broader economy.“
“The concept is long term. Investors would be able to receive market interest rates and returns on investment, in addition to N150 billion in seed capital.“
