.$2.2bn external borrowing ,.N250bn mortgage fund
.Targets GDP growth rate of 4.6%
.Crude oil price of $75 per barrel
.Exchange rate of N1400 to $1
.Oil output of 2.06mbpd
.As NNPCL hits 1.8mbpd crude oil production
The Federal Executive Council, FEC, has approved a proposed budget of N47.9trillion for the 2025 fiscal year.
Minister of Budget and Economic Planning, Atiku Bagudu disclosed this Thursday while briefing State House Correspondents after the FEC meeting presided over by President Bola Ahmed Tinubu.
According to him, the budget estimate was part of the Medium Term Expenditures Framework MTEF, for 2025 to 2027 and in line with the Fiscal Responsibility Act of 2007
He said that FEC also granted approval for the MTEF to be submitted to the National Assembly within the next few days as required by the 2007 Fiscal Responsibility Act.
The framework projected Gross Domestic Product, GDP, growth rate of 4.6%, crude oil price of $75 per barrel, exchange rate of N1400 to one United States Dollar and oil production of 2.06 million barrels per day
The federal government had in the 2024 Budget of ‘Renewed Hope’ , as presented by President Bola Tinubu proposed a total expenditure of N27.5 trillion (equivalent to $36.7 billion), with a projected revenue of N18.32 trillion ($24.4 billion) and a deficit of N9.18 trillion ($12.2 billion).
To achieve the estimated revenue, the federal government had also projected oil revenue at N7.68 trn, with government owned enterprises expected to contribute N4.07 trn revenue.
In the 2024 budget, non-oil taxes was projected at N3.52 trn, while independent revenue was pegged at N1.91 trn, minerals and mining to rake in N4.55 bn, while other revenue sources was estimated at N1.13 trn.
A breakdown of the expenditure showed non-debt recurrent expenditure of N9.92 trn, a capital expenditure of N7.72 trn (exclusive of transfers), debt service of N8.25 trn, a statutory transfer of N1.37 trn, and a sinking fund of N243.66 bn.
However Bagudu, while elaborating on the proposed 2025 budget in conjunction with Wale Edun, Minister of Finance and Coordinating Minister of the Economy, disclosed that the FEC also gave approval for a fresh external borrowing of $2.2bn, comprising of $1.7bn and SUKUK financing of $500m
Edun said the approval will strengthen the country’s finances and enhancee economic reforms.
The Minister added that he submitted two memos, including the one on external borrowing plans which when finally approved by the National Assembly will grant Nigeria access to the international capital market for some combination of the Euro bond and SUKUK financing.
“The first one is 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 our request.
He said that Nigeria’s economy had shown resilience in the financial markets, capacity and increased complexity through domestic issuance of dollar bonds which according to him attracted local investors.
“This being able to access the international capital market is also a sign of the acceptance and the support for the macroeconomic programme of Mr. President and indeed his entire administration, as we know that economic programme, that economic recovery and revival programme to turn around the economy, is focused on macroeconomic, the macroeconomic pillars of market pricing of the PMS and market pricing of foreign exchange.
“So it is on the basis and the strength of the progress to date that we do have a window to access the international capital market for up to $2.2 bn in financing, that is part of the Nigerian 2024 Appropriation Act as amended”.
He further disclosed that Council also approved the creation of a N250bn Real Estate Investment Fund, which aims to tackle Nigeria’s 22million housing deficit and provide long-term, affordable mortgage financing for Nigerians.
He gave assurance that the initiative will provide Nigerians with the opportunity to secure mortgages at interest rates of between 10% and 12%, which is significantly lower than the current market rates, which can exceed 30%, with tenures that could extend up to 20 years or more.
“Approval has been granted for the Ministry of Finance Incorporated (MOFI) Real Estate Investment Fund. This fund will serve as the basis for the revival of long-term mortgage financing in the Nigerian economy.
“The MOFI Real Estate Investment Fund will initially amount to N250bn and will provide low-cost, long-term mortgages to Nigerians who wish to acquire homes. It will help address part of the 22 million housing deficit.
“Of course, it will create jobs, stimulate economic growth, and pave the way for other private sector investors to participate in the housing construction industry, with significant benefits for the broader economy.
“The concept is long-term. Investors will have the opportunity to earn market rates of interest and returns on investment, blended with seed funding of N150 billion”, he stated.
NNPCL hits 1.8mbpd crude oil production
.Targets 2mbpd by year end
Meanwhile, the Nigerian National Petroleum Company Limited (NNPC Ltd) and its partners have increased crude oil and gas production to 1.8million barrels per day (mbpd) and 7.4standard cubic feet per day (scfd).
The company which announced this at a press briefing on Thursday said the feat was achieved in compliance with the mandate of President Bola Ahmed Tinubu.
Reacting to the development, the Group Chief Executive Officer, Mr. Mele Kyari, congratulated the Production War Room Team that anchored the production recovery process.
“The team has done a great job in driving this project of not just production recovery but also escalating production to expected levels that are in the short and long terms acceptable to our shareholders based on the mandates that we have from the President, the Honourable Minister, and the Board,” Kyari explained.
Giving details of the efforts of the Production War Room, the Chief War Room Coordinator and Senior Business Adviser to the Group Chief Executive Officer, Mr. Lawal Musa, disclosed that the feat was achieved through the collaborative efforts of Joint Venture and Production Sharing Contract partners, the Office of the National Security Adviser, as well as government and private security agencies.
He said the interventions that led to the recovery of production cut across every segment of the production chain with security agencies closely monitoring the pipelines.
He stressed that when the Production War Room team was inaugurated on the 25th June 2024, production was at 1.430mbpd, but the team swung into action, culminating into it sustaining the production recovery to 1.7mbpd in August and hitting the current 1.808mbpd in November.
“We are confident that with this same momentum and with the active collaboration of all stakeholders, especially on the security front, we can see the possibility of getting to 2mbpd by the end of the year,” he stated.
Also, on the development, chairman of the NNPC Ltd Board of Directors, Pius Akinyelure, who also congratulated the team, said he was happy to be part of the production recovery process, adding: “today, I will leave this place with my heart full of joy”.
He charged the Company’s Management to come up with a cashflow projection based on the new production figures to facilitate planning, stressing that he was looking forward to further production increase to 3mbpd.
On his part, the Honourable Minister of State for Petroleum (Oil), Senator Heineken Lokpobiri, expressed satisfaction with the performance of the team and pledged the Federal Government’s support for the company to do more.
