The 2025 Appropriation Bill targets N34.8 trillion revenue, it was learnt yesterday.
The Bill also projects a comprehensive debt restructuring strategy aimed at freeing up funds for critical infrastructure development.
This approach is one of the key components of the 2025-2027 Medium-Term Fiscal Framework and Fiscal Strategy Paper (MTEF/FSP), which the Federal Executive Council (FEC) approved on Thursday.
The MTEF/FSP with the N47.9 trillion 2025 Appropriation Bill are to be transmitted to the National Assembly for consideration.
The federal lawmakers resume today from a two-week recess.
With declining household and private-sector spending, the government plans to secure long-term non-commercial facilities with tenors ranging between 10 and 50 years and a moratorium of five to seven years.
According to the MTEF/FSP document released by the Budget Office of the Federation, the provision for debt service is expected to rise significantly due to the country’s large debt profile and the Central Bank of Nigeria (CBN) Monetary Policy Rate (MPR), which stood at 27.25 per cent as of September.
The MTEF/FSP has outlined ambitious revenue and expenditure goals in 2025.
Under revenue, the Federal Government is targeting N34.8 trillion, with N19.6 trillion and N5.7 trillion from oil and non-oil taxes respectively; N2.87 trillion from Government-Owned Enterprises (GOEs); N3.6 trillion from independent revenue sources and N4.8 trillion from other sources.
Next year’s expenditure goal of the government is N47.9 trillion, comprising N14.2 trillion for non-debt recurrent expenditure; N16.4 trillion for aggregate capital expenditure; N15.38 trillion for debt service and N2 trillion for other expenditures.
The government acknowledged persistent revenue mobilisation challenges, low oil and gas revenues, and escalating costs of fuel subsidies as contributors to the federal budget deficit.
Recent reforms, including the removal of petrol subsidies, reduction in tax waivers, and higher crude oil production, are expected to alleviate fiscal pressures.
To bridge fiscal deficits, the government will prioritize cheaper and more flexible borrowing options and implement revenue mobilization measures.
Borrowing, the document said, “will be a last resort, used only for long-term growth projects or critical needs”.
The government plans to intensify efforts to improve fiscal management by strengthening the budget process and scrutinizing spending by ministries, departments, and agencies (MDAs) next year.
Key targeted measures include: prioritising ongoing projects over new ones; streamlining administrative costs and merging overlapping agency functions; enhancing treasury controls to curb financial mismanagement and corruption and reviewing fiscal incentives to increase transparency in revenue collection.
According to the document, the need to create new agencies will be rigorously evaluated. Only when no agency exists that performs the same function that such need may be considered; Agency-by-agency review of functions, expenditure patterns and staffing levels, outputs and results, and identification of functions to privatize”.
The framework also emphasizes national security as a top priority. Investments will focus on military equipment, barracks accommodation, personnel welfare, and cybersecurity.
Collaborative efforts among security services will address challenges such as banditry, terrorism, and kidnapping to create a safer environment for economic growth.
The government plans to overhaul internal security strategies to safeguard lives, properties, and investments nationwide. Improved security conditions are expected to stimulate economic activity and social life (including nightlife, which constitutes between 24-40 per cent of economies of states where they are functioning well), enhance farm productivity, and boost access to education, especially for vulnerable groups like girls.
Assumptions for 2025-2027 MTEF/FSP
The Federal Government has also outlined ambitious economic projections and revenue strategies for 2025-2027 in the MTEF/FSP.
Central to the plan is achieving a 3.68 per cent economic growth rate, compared to 2.74 per cent in 2023 and 3.55 per cent in the outgoing year, amid a shrinking dollar-denominated GDP and ongoing fiscal challenges.
Nominal GDP is projected to grow from N293.74 trillion in 2024 to N352.36 trillion next year. It is to be primarily driven by inflation-related consumption.
In dollar terms, the GDP is expected to contract significantly, falling by nearly 40 per cent from $348.4 billion in 2023 to $218.3 billion in the outgoing year.
Inflation, which averaged 32.8 per cent in the first half of 2024, is projected to decline to 16.94 per cent in 2025, offering potential relief to households and businesses.
The document noted that the CBN anticipates stabilising the naira at N1,400/$ next year, “contingent on improved economic activities and reforms in the oil sector”.
Crude oil remains a key revenue driver, with a conservative benchmark price of $75 per barrel for 2025, slightly lower than $77.96 in 2024, ensuring budget realism.
The government plans to step up efforts to expand non-oil revenue streams to address fiscal gaps.
Tax administration reforms will target improved compliance, closing loopholes and bringing more businesses and individuals, especially from the informal sector into the tax net
