Editor
By Fatima Saka
The Senate has approved the 2025–2027 Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP), submitted earlier by the President.
This approval followed the adoption of a report presented during Tuesday’s plenary session by the Senate’s Joint Committees on Finance, and National Planning and Economic Affairs, chaired by Senator Sani Musa.
Key Projections and Approvals
The Senate outlined key economic indicators and projections for the three-year period:
1. Exchange Rate: Fixed at N1,400 to a dollar for 2025, 2026, and 2027.
2. Oil Benchmark Prices: Set at $75, $76.2, and $75.3 per barrel for the respective years.
3. Domestic Crude Oil Production: Increased to 2.06 million barrels per day (bpd) in 2025, 2.10 million bpd in 2026, and 2.35 million bpd in 2027, up from 1.78 million bpd in the preceding year.
4. GDP Growth Rates: Projected at 4.6%, 4.4%, and 5.5% for 2025, 2026, and 2027.
5. Inflation Rates: Estimated at 15.75%, 14.21%, and 10.04% for the same period.
The Senate also urged a reduction in petrol prices, citing the anticipated commencement of production at the Port Harcourt refinery as a significant factor.
Federal Budget Overview
According to the approved recommendations, total Spending: The proposed 2025 federal budget is N47.9 trillion, with N34.82 trillion in retained earnings.
Borrowing: New borrowings amount to N9.22 trillion, split between domestic and foreign sources.
Capital Expenditure: Projected at N16.48 trillion, with statutory transfers at N4.26 trillion and sinking funds at N430.27 billion.
Senate Debate Highlights
Senator Solomon Adeola (APC, Ogun West), Chairman of the Senate Committee on Appropriations, highlighted the Federal Government’s Compressed Natural Gas (CNG) initiative as a critical factor influencing the adoption of the N1,400 exchange rate.
“With operational refineries, forex demand will decrease. The CNG initiative provides Nigerians with a cost-effective alternative. For instance, traveling from Benin to Lagos costs about N130,000 on fuel but less than N48,000 with CNG. However, the high recurrent-to-capital expenditure ratio remains a challenge,” Adeola noted.
Former Senate Leader, Senator Yahaya Abdullahi (PDP, Kebbi North), emphasized the importance of supporting manufacturing industries to realize the MTEF projections fully.
Commendation and Remarks
Senate President, Senator Godswill Akpabio, commended the Joint Committees for their thorough analysis and diligent work on the framework.
Speaking to journalists, Senator Sani Musa expressed confidence in the achievability of the projections, emphasizing the necessity of ongoing consultations on tax reform bills.
“Tax reform requires broader consultation. It’s not about any specific region; it’s about what benefits all Nigerians,” he said.
The approved framework underscores the Senate’s commitment to fostering economic growth, reducing inflation, and ensuring fiscal sustainability in the coming years.
