Reps Approve 2025-2027 MTEF/FSP Ahead Of Budget Presentation
The House of Representatives has approved the 2025-2027 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) ahead of President Bola Tinubu’s scheduled presentation of the 2025 Appropriation Bill to the National Assembly next week.
The MTEF provides a multi-year framework for public spending, setting targets for fiscal policies to guide the budget process. The FSP, a key component of the annual budget process, outlines the country’s fiscal policy and macroeconomic framework for the medium term.
President Tinubu had transmitted the MTEF/FSP to the National Assembly on November 19, 2024, following approval by the Federal Executive Council.
The framework proposes a $75 per barrel oil benchmark for 2025, with projected production of 2.06 million barrels per day. The exchange rate is pegged at N1,400 per dollar, and the GDP growth rate is estimated at 6.4 percent annually.
During the House session chaired by Deputy Speaker Benjamin Kalu, lawmakers debated the framework’s recommendations, with Minority Leader Kingsley Chinda questioning the proposed oil benchmark. Chinda argued that retaining the 2024 benchmark of $77.96 per barrel would be more prudent, citing higher-than-expected oil prices earlier in 2024.
“The $75 benchmark seems too low, especially when the first quarter of 2024 saw prices reach $85 per barrel. While the global shift towards renewable energy is acknowledged, reducing the benchmark unnecessarily could constrain fiscal projections,” Chinda stated.
In defense, House Finance Committee Chairman Abiodun Faleke described the $75 benchmark as responsible. “Oil prices are unpredictable. While we benefitted from crises in oil-producing regions in 2024, there’s likely to be more stability in 2025. Overestimating revenue could inflate expectations unnecessarily,” he explained.
The House eventually adopted the $75 oil benchmark and passed the framework.
Another contentious issue was the projected increase in crude oil production from 1.78 million barrels per day (mbpd) in 2024 to 2.06 mbpd in 2025, with further increases planned for subsequent years. Chinda criticised the ambitious targets, pointing out that actual production as of late November was only 1.05 mbpd.
“Overstating production targets risks creating unrealistic revenue expectations. It is better to project conservatively and avoid reliance on borrowing to cover deficits,” Chinda argued.
Faleke countered, stating that production levels were improving and urged operators to work harder to achieve the targets. He noted that during former President Goodluck Jonathan’s tenure, production exceeded 2.5 mbpd, emphasising the importance of pushing for increased output.
The exchange rate projection of N1,400 to the dollar also sparked debate. Rep Gbefwi Gaza from Nasarawa State highlighted the volatility of the naira and its impact on the economy. “With most of our transactions pegged to the dollar, we must strengthen the naira to avoid excessive borrowing,” he said.
The House adopted inflation rate projections of 15.75 percent for 2025, 14.21 percent for 2026, and 10.04 percent for 2027. The proposed 2025 federal budget includes total spending of N47.9 trillion, with retained revenue of N34.82 trillion. Borrowing requirements are estimated at N9.22 trillion, combining domestic and foreign sources.
Capital expenditure is set at N16.48 trillion, statutory transfers at N4.26 trillion, and a sinking fund of N430.27 billion.
With the MTEF/FSP approved, attention now turns to the presentation of the 2025 Appropriation Bill, which will further detail the government’s fiscal priorities for the upcoming year.
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Reps Approve 2025-2027 MTEF/FSP Ahead Of Budget Presentation is first published on The Whistler Newspaper
