UPDATE: FEC APPROVES N47.9TN BUDGET FOR 2025
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The proposed national budget of ₦47.9 trillion for the fiscal year 2025 has been approved by the Federal Executive Council.
Briefing newsmen after the FEC meeting held at the Council Chambers and presided by President Bola Tinubu, Minister of Budget and Economic Planning, Atiku Bagudu, explained that the budget approval was part of the Medium Term Expenditure Framework (MTEF) for 2025-2027, in accordance with the Fiscal Responsibility Act 2007.
Bagudu said the executive will put necessary efforts in place to ensure that the 2025 budget estimate was passed by the National Assembly and signed into law by the president before the end of December.
Bagudu explained that FEC pegged the price of crude oil at $75 per barrel, exchange rate at N1,400 to the dollar, and oil production at 2.06 million barrels per day.
He added that with the growth rate of 3.19 per cent, which came in the second quarter of 2024, the federal government will continue to tackle inflation, strengthen economic resilience, and provide more support for the economy in 2024.
The minister disclosed that the council also reviewed the 2024 budget implementation, and added that this included promising progress in revenue collection and expenditure management, “despite lags in projected targets, the overall trajectory. So it shows that fiscal efforts are on track, these key non-oil streams are performing better than anticipated”.
The minister disclosed that the council also reviewed the 2024 budget implementation, and added that this included promising progress in revenue collection and expenditure management, “despite lags in projected targets, the overall trajectory. So it shows that fiscal efforts are on track, these key non-oil streams are performing better than anticipated”.
He said the Nigerian economy had significantly turned in the right direction, achieving the gross positive growth rate in economic stability.
According to Bagudu, “Equally It included parameters for the 2025- 2027 medium term physical framework, which includes an oil price benchmark of $75 per barrel for 2025, oil production of 2.0 6 million barrels a day, as well as an exchange rate of 1,400 Naira to $1, and GDP growth of 4.6 per cent expected for 2025.
“The federal government budget estimate as the aggregate expenditure is estimated at N47 trillion, and this includes a borrowing of 13. 8 trillion, which is 3.87 per cent of estimated and it includes projections, especially for the first time, provisions of contribution to the development commissions that have been passed by the National Assembly.”
The minister also stated that FEC approved the 2025-2027 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Papers (FSP).
Bagudu added that the federal government was working to ensure a January-December budget circle.
The federal government also on Thursday okayed the establishment of a Ministry of Finance Incorporated Real Estate Investment Fund, with a start-off of N250 billion, that will provide low cost, long term mortgages to Nigerians desirous of acquiring houses.
Minister of Finance and Coordinating Minister of the Economy, Wale Edun, while briefing newsmen, said the fund was the basis for the revival and return of long term mortgage financing to the Nigerian economy.
Edun explained that it would complete or help to fill part of the gaping 22 million units housing deficit, create jobs, stimulate economic growth, and pave the way for other investors to participate more in the housing construction industry.
Edun stressed that “long term investors have the opportunity to earn market rates of interest on investment and market returns, market price-based rates of return on investment”.
He added, “When I say low cost, we are talking about low double digit, maybe 11, 12 per cent, maybe even less, depending on market conditions. And that will be achieved by attracting long term savers, life insurance companies, maybe pension funds, within the limits of what is allowed, and other savers.
“Their money will be blended with low cost funding that the government has access to, at one per cent funds that are available for 40 years. And by blending the two, depending on what percentage of money you merge with one per cent, with market based interest rates, you will end up with affordable pricing on the mortgages.
“The tenor can be the likes of 20 years and more. It relieves Nigerians, who normally will be faced with almost 30 per cent interest rates.”
FEC also approved fresh external borrowing of $2.2 billion, made up of $1.7 billion and SUKUK financing of $500 billion.
The approval, Edun stated, was to strengthen the country’s finances and enhance economic reforms.
According to him, the external borrowing approval, when finalised by the National Assembly, will grant Nigeria access to the international capital market for some combination of the Euro bond and SUKUK financing.
The finance minister stated, “The first one was to complete the borrowing programme of the federal government in terms of the external borrowing with the approval of the $2.2 billion financing programme, made up of access to the international capital market for some combination of the Euro bond offer and the Sukuk bond offer, perhaps a Euro bond of about $1.7 billion and Sukuk financing of another $500 million, the actual makeup of the financing, which will be done as soon as the National Assembly has considered it.
The minister added that Nigeria had showcased the resilience of its financial market through domestic issuance of dollar bonds, which attracted Nigerian investors.
Edun stressed that Nigeria accessing the international capital market was an indication of the country’s acceptance and support for President Bola Tinubu’s macro-economic programmes.
He said, “Being able to access the international capital market is also a sign of the acceptance and the support for the macroeconomic programmes of Mr President and, indeed, his entire administration, as we know that economic programme, the economic recovery and revival programme to turn around the economy, is focused on macroeconomic pillars of market pricing of foreign exchange.”
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