In Nigeria, before a final annual budget is presented to a joint session of the National Assembly by the country’s president, what usually precedes this is the Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper. This is a multi-year public expenditure which lets every citizen get a hint of where their government is taking them. Having envisaged spending could reach up to ₦47trillion, is it possible that the months after December 2024 will be a whole lot better than right now from an economic standpoint?

Even though analysts struggle to completely take in President Bola Tinubu’s projections, his minister Senator Atiku Bagudu applied optimism to balance the doubts over where opportunities to fund the budget will come from. But before this came the announcement of what is to be expected.

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On Thursday, 14 November 2024, according to Senator Bagudu heading the Budget and Economic Planning department, the Federal Executive Council approved a memorandum by the Ministry of Budget and Economic Planning, which was presented by the Director-General of the Budget Office [Mr Tanimu Yakubu] on the Medium-Term Expenditure Framework and Fiscal Strategy Paper for 2025 – 2027.

The minister was addressing State House correspondents at the Aso Villa yesterday when he shared this.

As several wars are still going on across the globe, the price of crude oil which represents an essential income generation driver this month of November has been hovering around $75 on average and it is against this rate and Chinese lessened demand for the commodity that Nigeria’s expenditure planners pegged their expectations.

With the rate set, although it can be later adjusted, in the presidency’s projections, there will be oil production of 2.06 million barrels a day, as well as an exchange rate of ₦1400 to the dollar and GDP growth of 4.6 per cent, says Senator Bagudu.

At the Aso Rock presser, the minister anticipated that presenting the MTEF to parliamentarians could happen today or in the next three days.

The budget’s cornerstone is the strategic allocation of funds across various sectors, with a keen focus on bolstering infrastructure, healthcare, education, and security. These investments are pivotal in creating a robust foundation for a diversified economy, less reliant on the volatile oil sector, which has long been the nation’s financial backbone.

Analysts predict a moderate improvement in the nation’s economic indicators, with a projected GDP growth of 3.2% in 2024 and 3.4% in 2025. Inflation, which has been a persistent challenge, is expected to rise before moderating in the subsequent years as the government’s fiscal and monetary policies take effect.

The budget size that was approved for presentation to the National Assembly in the MTEF is ₦47.9tn with new borrowings of ₦9.22tn to finance the budget deficit in 2025 as well as noting that we need to sustain the commendable market deregulation of petroleum prices and exchange rate, and to compel the Nigerian National Petroleum Corporation Limited to lower its oil and gas production cost significantly, and even to consider the need to amend the relevant sections of the Petroleum Industry Act 2021 to address the significant risk to Federation.

Before totally leaving the current year, the minister while looking forward to seeing a new budget passed soon also revisited the shape of the government’s spending using data covering three weeks ago. Actual spending as of August 2024 ending was N16.98tn as against the prorated spending target of N23.37tn at the end.

Of this amount, N7.41tn was for debt service, and N3.7tn for personnel costs including pension. Further, N3.65tn has been released for capital projects.

Most of the delays for capital project release have been earlier legacy issues, in the sense that the new procedure for upload requires a lot of capacity building and delayed uploads.

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Meiza Nigeria