Overview

The document is the final draft of Nigeria's 2023-2025 Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP), prepared by the Budget Office of the Federation and the Federal Ministry of Finance, Budget and National Planning. It outlines the economic and fiscal outlook, budget performance reviews, revenue projections, and medium-term fiscal framework. Key global economic developments indicate moderate growth with downside risks from the Russia-Ukraine war, high inflation, and monetary tightening. Domestically, Nigeria's GDP grew by 3.4% in 2021 but faces challenges like high unemployment (33.3% in Q4 2020), underemployment (22.8%), and rising inflation (15.92% by March 2022). The monetary sector shows interest rates (MPR at 13% by September 2022), exchange rate volatility (Naira depreciated against USD), and foreign reserves ($39.1 billion by September 2022). Fiscal sector concerns include rising public debt (N39.96 trillion by December 2021) and debt service-to-revenue ratio. The 2021 budget performance saw prorated revenue of N2.09 trillion (69.4% of target) and expenditure of N5.74 trillion (76.9% of target). For 2022, Q1 revenue was N982.96 billion (36.7% of target) and expenditure N2.40 trillion (72.8% of target). Revenue projections for 2023-2025 are based on assumptions: crude oil price benchmark of $70/bbl (2023), $65/bbl (2024-2025); oil production of 1.6 mbpd (2023), 1.7 mbpd (2024-2025); and exchange rate of N435/USD (2023), N450/USD (2024-2025). Non-oil revenue assumptions include increased tax revenue via automation and efficiency. Medium-term macroeconomic parameters include GDP growth projections (3.4% in 2023, 3.7% in 2024, 4.0% in 2025), inflation declining to 17.8% (2023), 14.2% (2024), 10.4% (2025). The fiscal framework projects total federation revenues of N17.70 trillion (2023), N19.42 trillion (2024), N20.60 trillion (2025); FGN revenue of N10.49 trillion (2023), N11.78 trillion (2024), N12.77 trillion (2025); and FGN expenditure of N19.76 trillion (2023), N20.58 trillion (2024), N21.35 trillion (2025). Fiscal deficits are projected at N9.27 trillion (2023), N8.80 trillion (2024), N8.58 trillion (2025), with financing from domestic and foreign sources.

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