Senate Passes 2025-2027 Fiscal Framework, Sets Exchange Rate at N1,400/USD

The Senate has approved the 2025-2027 MTEF-FSP, $75 oil benchmark, and 5.5% GDP growth by 2027.

The Senate on Tuesday, passed the 2025-2027 Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).

The essence of MTEF-FSP is to provide a comprehensive, multi-year plan for government spending, outlining revenue projections, expenditure priorities, and fiscal strategies.

It is essentially acting as a roadmap for managing public finances over a medium-term period, allowing for better resource allocation, policy consistency, and informed budgeting decisions across different ministries and departments. 

The senate passed the fiscal document following the presentation of the report by Chairman of the Joint Committees on Finance and National Planning and Economic Affairs, Senator Sani Musa (Niger East).

The senate also tasked its Committees on Finance and Petroleum as well as Gas to investigate allegations that the Nigerian National Petroleum Corporation Limited (NNPCL) withheld about N8.48 trillion in petrol subsidies, and $2 billion (NGN 3.6 trillion) in unpaid taxes (dividends).

The allegation was highlighted by reports from the Nigeria Extractive Industries Transparency Initiative (NEITI) and the Revenue Mobilisation, Allocation, and Fiscal Responsibility Commission (RMAFC).

That was as the Office of the Auditor-General of the Federation (AuGF) said it had received the necessary and complete documents required to verify the N2.7 trillion fuel subsidy claim by NNPCL against the government.

Chairman, Senate Committee on Public Accounts, Senator Aliyu Wadada, corroborated the claims of the AuGF on the floor of the Red Chamber on Tuesday, when he said the NNPCL team had been consistently shunning his panel’s summons over the matter.

Wadada said the Federal Inland Revenue Service (FIRS) also showed up with cooked documents it claimed were from international finance firm, J.P. Morgan.

He did not spare the Central Bank of Nigeria (CBN), as he accused the apex bank of failing to remit its profits on Ways and Means, totalling N6 trillion, since 2023, into the Federation Account. 

The House of Representatives had last week passed the MTEF-FSP.

Like the senate, the House also asked its Committees on Finance, Petroleum Upstream, as well as Petroleum Downstream to investigate reports from RMAFC over allegations that NNPCL withheld N8.48 trillion as claimed subsidies for petrol.

The investigation will address the Nigeria Extractive Industries Transparency Initiative’s report stating that NNPCL failed to remit $2 billion (N3.6 trillion) in taxes to the federal government.

The committees were further directed to verify the total cumulative amount of unremitted revenue (under-recovery) from the sale of Premium Motor Spirit (PMS) by NNPCL between 2020 and 2023.

Some of the recommendations in the MTEF, as adopted by the House, were: projected oil benchmark prices of USD75, USD76.2 and USD75.3 per barrel for 2025, 2026 and 2027, respectively; and three-year projections for domestic crude oil production of 2.06, 2.10 and 2.35 million barrels per day for the subsequent years of 2025, 2026 and 2027, respectively.

Others were GDP growth rate at 4.6 per cent, 4.4 per cent, and 5.5 per cent for years 2025, 2026 and 2027, respectively.

The senate, in its version passed on Tuesday, approved the exchange rate projection of N1,400 to a dollar for the 2025-2027 with a provision for review in early 2025, based on prevailing monetary and fiscal policies.

The upper chamber also resolved that any excess on the official figure would be used for debt servicing.

In its resolutions, the senate adopted inflation rate projections of 15.75, 14.21 and 10.04 per cent for 2025, 2026 and 2017, respectively.

Part of the resolutions read, “The 2025 Federal Government of Nigeria budget proposed spending of N47.9trilion of which N34.82 trillion is retained. New borrowings stood at N9.22tn, made up of both domestic and foreign borrowings.

“Capital expenditure is projected at N16.48 trillion with statutory transfers standing at N4.26 trillion and sinking funds projected at N430.27 billion.

“Debt service was valued at N15.38 trillion; pensions, gratuities and retirees’ benefits stood at N1.443 trillion and fiscal deficit at NGN13.08 trillion.

“That the capital expenditure is projected at N16.48 trillion which is exclusive of transfers. Statutory transfers stand at N4.26 trillion, while Sinking Fund is projected at N430.27 billion.

“The committee approves the respective figures for total recurrent (non-debt) at N14.21 trillion; special intervention for recurrent and capital is at NGN200 billion and N7 billion.

“That the National Assembly do approve the Promissory Note Programme and Bond Issuance to settle outstanding claims and liabilities of federal government owed to states, high priority judgments as well as liabilities incurred by federal ministries, department and agencies on behalf of government.

“That the Committee recommends that a quarterly investigative hearing with revenue generating agencies to track their compliance with the Fiscal Responsibility Act and punish those in clear contravention of the Act.

“That the Committee on Finance review and initiate inquiry into the implementation of the Nigerian Export Supervision Scheme (NESS) Act, specifically focusing on the inspection and monitoring of oil and gas exports by the Ministry of Finance and the Central Bank of Nigeria (CBN).

“This is to ensure effectiveness, compliance, and oversight mechanisms under the Act, identify gaps or challenges, and enhance revenue for the Government, through transparency, accountability and efficiency of export supervision in line with national economic objectives.

“That the Committees on Finance and Customs to initiate an investigative inquiry into the operations of the Import Duty Exemption Certificate (IDEC) programme, with a focus on the administration of import waivers and their impact on revenue losses by the Ministry of Finance and the Nigeria Customs Service