The Lagos Chamber of Commerce and Industry (LCCI) has raised concerns over the Federal Government’s proposed 2025–2027 Medium-Term Expenditure Framework (MTEF), warning that overly optimistic projections could undermine fiscal sustainability and economic stability.
The 2025 budget, set at N47.9trn, represents a 36.64 per cent increase from N35.06trn in 2024 and is the highest in Nigeria’s history in nominal terms.
However, LCCI noted that the assumptions underpinning this record-breaking budget are detached from current macroeconomic realities, particularly the proposed exchange rate of N1,400 to the dollar and an inflation target of 15.8 per cent.
In a statement, signed by the Director-General of Lagos Chamber of Commerce & Industry, the LCCI highlighted the disparity between these assumptions and prevailing market conditions, where the exchange rate averages above N1,600 to the Dollar, and inflation surged to 33.88 per cent in October 2024.
“It is unrealistic to assume a 51 per cent decline in inflation within a year, especially considering the persistent factors driving inflation and exchange rate instability,” the Chamber stated.
The LCCI also expressed alarm over rising debt servicing costs, projected to increase by 91.2 per cent to N15.38trn in 2025, accounting for 32.1 per cent of the total budget. Combined with a deficit of N13.08trn and planned borrowings of N9.22trn, the Chamber described the fiscal outlook as “unsustainable” amid a national debt of approximately N134trn as of June 2024.
Beyond the figures, the LCCI emphasized the need for policy clarity and an enabling environment for private sector growth to achieve the government’s projected GDP growth for 2025.
It called for targeted investments in resilient sectors such as food production, power supply, and Small and Medium-Sized Enterprises (SMEs) to address critical issues like unemployment, inflation, and insecurity.
The statement urged the Central Bank of Nigeria (CBN) to limit Ways and Means Advances to the Federal Government to the statutory five percent threshold and advocated strict adherence to the Fiscal Responsibility Act in managing borrowings and expenditures.
On non-oil revenue, the LCCI warned of potential volatility due to ongoing economic uncertainties, a tense business climate, and debates on tax reforms. It also stressed the importance of climate change adaptation and mitigation, urging increased funding to address the growing impact of climate-related disasters.
“The government must prioritize policies that tackle inflation, stabilize the exchange rate, and reduce youth unemployment,” the Chamber advised.
It also called for greater coordination between monetary and fiscal policies to foster a stable economic environment and sustainable growth.