President Bola Ahmed Tinubu on Tuesday transmitted the 2025–2027 Medium Term Expenditure Framework (MTEF) and the Fiscal Strategy Paper (FSP) to the National Assembly for consideration and passage.

Speaker of the House of Representatives, Hon. Abbas Tajudeen, read the letter on the floor of the House on Tuesday.

The MTEF is a three-year rolling plan used as a framework for the annual budget. The Federal Executive Council (FEC) approved the policy document last week Thursday.

The MTEF is a way for governments to link their budget to broader fiscal policy goals, and it can help to: Ensure fiscal discipline, Improve the effectiveness of public spending, Enhance transparency and accountability, Provide a clearer understanding of the impact of policy choices and Bolster confidence in the government’s ability to manage its finances.

The MTEF is typically three to five years long and includes a combination of prescriptive yearly ceilings and forward estimates.

In the MTEF approved by the FEC, the crude oil benchmark was set at $75 per barrel, with oil production projected at 2.06 million barrels per day (Bpd).

The government also pegged exchange rate parameters at N1,400 per dollar and set a gross domestic product (GDP) growth rate of 6.4 percent.

But Section 11(1)(b) of the Fiscal Responsibility Act 2007 mandates the Federal Government, not later than four months before the commencement of the next financial year, lay before the National Assembly, an MTEF for the next three financial years. – 2025, 2026 and 2027 in this case.

The late presentation of the MTEF according to those well grounded in budget preparation was of the opinion that the January-December budget cycle is likely going to be breached as there is little time between now and the end of the year for budget presentation, scrutiny (budget defence), passage, and the presidential accent.

Businesses may be adversely impacted as they often depend on the government’s budget details to plan their investments, expenditures, and pricing. A delayed budget makes it difficult for the private sector to align with government priorities or anticipate changes in taxes, tariffs, and spending stressing that a delayed budget presentation is injurious to the government itself.

Delays in the budget presentation can also affect the government’s revenue collection plans. For instance, if new tax policies or increases are proposed in the budget, these cannot be implemented until the budget is approved. This can lead to lower-than-expected revenue collection for the government, affecting its ability to finance critical programmes and potentially increasing the budget deficit.

Those familiar with budget presentation cautioned that late budget presentation can create a ripple effect that impacts nearly all aspects of the economy, from government spending and investor confidence to inflation, borrowing costs, and funding of the social sector.

The Medium-Term Expenditure Framework (MTEF) is a multi-year plan that outlines how a government will spend its money and what its resource requirements will be. The MTEF for 2025–2027 for Nigeria includes:
A federal budget of ₦47.9 trillion
New borrowing of ₦9.22 trillion
An oil benchmark of $75 per barrel
Production of 2.06 million barrels per day
An exchange rate of ₦1,400 to the dollar
A projected GDP growth of 4.6% in 2025.

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