The federal government has proposed N47.9 trillion for the 2025 budget, Minister of Budget and Economic Planning Senator Abubakar Atiku Bagudu has said.
The minister said this Thursday while briefing State House correspondents at the end of the Federal Executive Council (FEC) meeting, presided over by President Bola Ahmed Tinubu.
He said the FEC approved the Medium Term Expenditure Framework (MTEF) for 2025-2027.
The minister said the proposed budget would be forwarded to the National Assembly Friday, November 15, 2024 or latest Monday November 18, 2024.
He said the federal government was working towards ensuring a January-December budget circle.
The minister said the government pegged the crude oil benchmark at $75 per barrel and oil production at 2.06 million barrels per day.
He said the exchange rate was pegged at N1, 400 to $1, stressing that the government targets a 6.4 percent GDP growth.
The minister said with the growth rate of 3.19% which comes in the second quarter of 2024, the federal government would continue to tackle Inflation, strengthen economic resilience and provide more support for the economy.
“It also included a review of the 2024 budget implementation, where it acknowledged that a review of the implementation of development 2024 budget reviews promising progress in revenue collection and expenditure management, despite lags in pro rated targets, the overall trajectory shows that fiscal efforts are on track these key non oil streams performing better than anticipated.
“Equally, it included parameters for the 2025- 2027 medium term physical framework, which include an oil price benchmark of $75 barrel for 2025 oil production of 2.0 6 million barrels a day, as well as an exchange rate of 1400 Naira to $1 and GDP growth of 4.6% the expected that for 2025.
“The federal government budget estimate is the aggregate expenditure is estimated at 47 trillion, and this includes a borrowing of 13. 8 trillion, which is 3.87% of estimated and it includes projections especially for the first time, provisions of contribution to the development commissions that have been passed by the National Assembly who are in the process of being passed by the National Assembly,” he said.
…MTEF, FSP
On approval of the 2025-2027 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Papers (FSP), the minister said the executive would ensure that the 2025 budget is passed and signed before December 2024.
He said the council also reviewed the 2024 budget, highlighting significant advancements in revenue collection and expenditure management.
He said despite some delays in meeting pro-rated targets, officials noted that key non-oil revenue streams are performing better than expected.
Bagudu said the overall fiscal trajectory remains positive, indicating that the government’s financial efforts were on track.
…Approves $2.2bn borrowing plan
Also in a similar briefing, Minister of Finance and Coordinating Minister of the Economy Wale Edun said the FEC approved a $2.2 billion external borrowing plan to strengthen the country’s finances and support economic reforms.
He said the financing package would be raised through a combination of Eurobonds and Sukuk bonds.
Edun said $1.7 billion is expected to come from the Eurobond offer and $500 million from Sukuk financing.
He said the borrowing would occur within the fiscal year, and the ultimate funding arrangement would be decided by market conditions and transaction adviser advice.
“The first objective is to complete the federal government’s external borrowing program with the approval of the $2.2 billion financing package, which will include access to the international capital market through a combination of Eurobonds and Sukuk bonds —approximately $1.7 billion from the Eurobond offer and $500 million from Sukuk financing.
“The actual composition of the financing will be finalized once the National Assembly has considered and approved the borrowing plan. After the external borrowing approval is granted, the funds will be raised as soon as possible within the year.
“The exact combination of instruments will depend on the advice of transaction advisers and market conditions when we decide to enter the market.
“Earlier in the year, we demonstrated the resilience of the Nigerian financial markets and their capacity to handle more complex and sophisticated offerings, such as the domestic issuance of dollar bonds that attracted investors from both Nigeria and abroad,” he said.
The minister said the plan was an indication of increased trust in Nigeria’s economic recovery under the Tinubu administration.
He said overseas borrowing was made possible by the government’s economic agenda, which includes market-based pricing for important economic variables like foreign exchange and petroleum goods.
The minister said the FEC also approved the establishment of a N250 billion real estate investment fund to address Nigeria’s housing shortage and offer long-term and reasonably priced mortgage finance to Nigerians.
The initiative, according to him, would provide opportunities for Nigerians to secure mortgages at interest rates significantly lower than the current market rates.
“Approval has been granted for the Ministry of Finance Incorporated (MOFI) real estate investment fund. 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 address part of the 22 million-unit 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 will have the opportunity to earn market rates of interest and returns on investment, blended with seed funding of N150 billion,” he said.