Tinubu Submits 2025-2027 Budget Framework to National Assembly, Seeks Approval to Borrow ₦1.76tn to Fund 2024 Budget Deficit

Confidence UbaniNovember 19, 20241 Mins read444

President Bola Tinubu has written to the National Assembly seeking approval for ₦1.767 trillion in new external borrowing. The Speaker of the House read the request during a plenary session on Tuesday. The loan is intended to partially fund 2024’s budget deficit.

The President also submitted the 2025-2027 Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP). Section 18 of the Fiscal Responsibility Act (FRA) 2007 requires the President to present the budget four months before the next financial year. Section 19 mandates the National Assembly to review and pass the bill within 90 days of submission. As of Tuesday, November 19, the MTEF submission came several weeks late.

The 2025 budget framework projects a ₦13.08 trillion deficit, significantly higher than the ₦9.18 trillion deficit for 2024. The government attributed this increase to rising expenses, including a new minimum wage, pension obligations, and escalating debt servicing costs. The President’s recent request to borrow a fresh N1.767 trillion will further widen this deficit.

The Central Bank of Nigeria (CBN) recently disclosed that $3.58 billion was spent on external debt servicing between January and September 2024. According to the Debt Management Office (DMO), the country’s external debt stock increased by $780 million in the second quarter of 2024, rising from $42.12 billion in March to $42.9 billion by June.

Following the liberalisation of the exchange rate, the naira’s depreciation further raised the valuation of external debt in naira terms. An investment management company, Afrinvest report, predicted that Nigeria’s public debt will rise to ₦130 trillion by December 2024. External debt, however, is projected to rise to $45.1 billion by the end of 2024.

Amid these concerns of a worsening debt crisis, the Federal Executive Council (FEC) recently approved a $2.2 billion external borrowing plan under the 2024 budget. During a State House briefing, Finance Minister Wale Edun explained that the plan included $1.7 billion in Eurobonds and $500 million in Sukuk bonds.

These funds are expected to support Nigeria’s 2024 budget deficit, which reached 7.5 per cent of the country’s Gross Domestic Product as of August 2024. The reliance on borrowing and the growing gap between revenue and expenditure continue to strain Nigeria’s economy.