by Our Analysts
Nigeria plans to finance the N13.13 trillion deficit in its proposed N47.96 trillion 2025 budget through borrowing, Minister of Finance and Coordinating Minister for the Economy, Wale Edun, said on Monday.
The 2025 budget proposal, which was approved by Federal Executive Council (FEC) at its last meeting for 2024 on Monday, is based on an oil price benchmark of $75 per barrel, oil production of 2.06 million barrels per day, and an exchange rate of one N1,400 to the dollar.
The budget proposal has a total projected revenue of N34.82trn, projected expenditure of N47.96trn (a 36.8 per cent increase from the 2024 estimate), and projected deficit of N13.13trn (or 3.89 per cent of GDP).
Edun, while briefing State House Correspondents after the FEC meeting at the Presidential Villa, Abuja, said the budget was designed within the context of how far and how much progress had been made under the leadership of President Bola Tinubu over the last 18 months.
“And even looking at it from an international context, we, like governments around the world, are concerned about how to achieve fiscal sustainability, revenue to expenditure and borrowing that is balanced, to create an environment in which the economy can grow,” Edun said.
“Private sector-led economies such as ours and others rely on investors to put down their money in various projects, increase productivity, create jobs, grow the economy and in the case of countries such as ours, bring the people out of poverty,” he said.
He explained that the Tinubu administration had put in place policies that ensured market pricing of petroleum products, foreign exchange, and efforts had been made to improve the pricing of electricity.
“Just recently, Shell announced a $5 billion investment, Total announced a multi-billion-dollar investment just before that, and there are so many others expressing interest in investing in this country,” the Finance Minister said.
“So, progress has been made. There is greater fiscal sustainability and as I said, even the European countries are struggling to achieve some of these critical macroeconomic reforms.
“This budget is based on government spending in critical areas, but also more importantly, encouraging and making room for private sector investment,” he said.
Pointing to improvements in the economy which he said were encouraging, Edun said, “For the first time in about 25 years we have domestic refinement of petrol, not just to produce petrol but also raw materials for industries across a whole range, from pharmaceuticals to building products to textiles.”
Also addressing the State House Correspondents, Minister of Budget and Economic Planning, Atiku Bagudu, said FEC approved the budget proposals with amendments as directed by President Tinubu following a presentation led by the Director-General of the Budget Office, Tanimu Yakubu.
“The 2025 budget proposal articulates the Federal Government’s financial plan for the 2025 fiscal year and aligns with the renewed hope agenda and the national development plan, 2021, 2025,” Bagudu said.
“Earlier, the Medium Term Expenditure Framework and Fiscal Strategy Paper was designed to build on the advances in macro economics stability, security gains, infrastructure gains, human capital development effort and creative industries, manufacturing and all the measures that have been taken to expand economic activity, create consumer credit, national agricultural development fund, gas, CNG initiative, housing initiative.
“All of them intended to build economic activity and the the successes noted in 2024,” he said.
He recalled that the Tinubu administration inherited N6.1 trillion deficit from the 2023 budget, stating that with the success achieved in 2024, the government was still able to maintain the deficit.
President Tinubu was earlier scheduled to present the budget to the National Assembly on Tuesday, December 17, 2024 (today), but the presentation was later shifted Wednesday, December 18.
