The Red Chamber has officially approved the Medium-Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP), setting the stage for the consideration of the 2025 budget proposal. The MTEF/FSP is designed to provide a detailed, multi-year financial plan, outlining government revenue projections, expenditure priorities, and fiscal strategies.
The approval follows the adoption of a report by the Senate’s joint Committees on Finance, and National Planning & Economic Affairs, led by Senator Sani Musa from Niger East. In a related development, the Senate has directed its Committees on Finance, Petroleum, and Gas to investigate allegations that the Nigerian National Petroleum Corporation Limited (NNPCL) withheld approximately N8.48 trillion in petrol subsidies, and an additional $2 billion (roughly N3.6 trillion) in unpaid taxes and dividends.
The Senate further instructed its committees to verify the total amount of unremitted revenue, also known as under-recovery, from the sale of Premium Motor Spirit (PMS), or petrol, by the Nigerian National Petroleum Corporation Limited (NNPCL) between 2020 and 2023.
In addition, the Senate has tasked the relevant committees with conducting a thorough investigation into agreements made by the NNPCL, Nigerian Liquefied Natural Gas (NLNG), and the Nigerian Immigration Services. The goal is to ensure proper reconciliation of remittances to the Federation Account.
In its three-year financial projections, the Senate has set the exchange rate at N1,400 to the dollar for the years 2025, 2026, and 2027, reflecting the current monetary and fiscal policies.
It also outlined key economic projections for the years 2025 to 2027, including oil benchmark prices, crude oil production, GDP growth, and inflation rates. For the oil sector, the Senate projected benchmark prices at $75 per barrel for 2025, $76.2 for 2026, and $75.3 for 2027. Domestic crude oil production is expected to increase significantly, rising from 1.78 million barrels per day in the previous year to 2.06 million in 2025, 2.10 million in 2026, and 2.35 million in 2027.
In terms of economic growth, the Senate forecasted GDP growth rates of 4.6% in 2025, 4.4% in 2026, and 5.5% in 2027. Inflation is expected to decline over the three years, with projected rates of 15.75% in 2025, 14.21% in 2026, and 10.04% in 2027.
The Senate has called for a reduction in petrol prices following the commencement of production at the Port Harcourt refinery. In reviewing the 2025 budget proposal, the Senate highlighted that the Federal Government’s proposed spending stands at N47.9 trillion, with N34.82 trillion retained. The budget also includes new borrowings amounting to N9.22 trillion, covering both domestic and foreign loans, while debt service is projected at N15.38 trillion.
The capital expenditure is set at N16.48 trillion, excluding transfers, with statutory transfers standing at N4.26 trillion. The Sinking Fund is projected at N430.27 billion, and pensions, gratuities, and retirees’ benefits are estimated at N1.443 trillion. The fiscal deficit for the year is projected at N13.08 trillion.
The Senate Committee on Appropriations Chairman, Senator Solomon Adeola, explained that the federal government’s Compressed Natural Gas (CNG) initiative was a key factor behind the decision to set the exchange rate at N1,400 to one dollar. Senator Solomon Adeola said, “With the functioning of our refineries, the demand for Forex will drop. With the CNG initiative, Nigerians will have an option. If you travel from Benin to Lagos, the fuel cost is about N130,000, but with CNG, it won’t exceed N48,000. Another issue to be addressed is the recurrent-to-capital ratio, which is very high.”
Senator Yahaya Abdullahi of the People’s Democratic Party, representing Kebbi North, emphasized the importance of supporting the manufacturing industries to achieve the projections outlined in the MTEF.
