As President Bola Tinubu approaches the presentation of the 2025 budget to the National Assembly, the Senate has already approved the 2025–2027 Medium Term Expenditure Framework and Fiscal Strategy Paper that he submitted. The approval came after discussions led by Senator Sani Musa, chairman of the Senate’s joint Committees on Finance, National Planning, and Economic Affairs. The Senate’s decision reflects a coordinated effort regarding the country’s financial strategy, while they simultaneously prioritize oversight to ensure transparency and accountability in the oil and gas sector. This includes investigating claims that the Nigerian National Petroleum Company Limited (NNPCL) has withheld substantial amounts in supposed subsidies for petrol.
In response to allegations by the Revenue Mobilisation, Allocation and Fiscal Responsibility Commission, the Senate has mandated its relevant committees to probe the NNPCL for not remitting $2 billion in taxes, as reported by the Nigeria Extractive Industries Transparency Initiative (NEITI). The scrutiny extends to verifying unremitted revenues stemming from petrol sales by the NNPCL over a span that covers 2020 to 2023. Moreover, the Senate indicated interest in examining agreements made by the NNPCL and other companies, including the Nigerian Liquefied Natural Gas (NLNG), to ensure that necessary remittances to the Federation Account are properly reconciled.
In its 2025–2027 fiscal projections, the Senate has set an exchange rate of N1,400 to USD throughout these years and established oil benchmark prices starting from $75 per barrel. Moreover, the projected domestic crude oil production is expected to show a steady increase from 1.78 million barrels per day in prior years to a target of 2.35 million barrels per day by 2027. These figures exhibit a cautious optimism about increased oil production, which carries implications for the country’s economic growth, illustrated by anticipated GDP growth rates of 4.6%, 4.4%, and 5.5% for the three years.
Inflation is another focal point of the Senate’s fiscal outlines, with projections of 15.75%, 14.21%, and 10.04% over the 2025–2027 period. In line with efforts toward economic stabilization, the Senate has advocated for a reduction in petrol prices, particularly given recent advancements in the Port Harcourt refinery. The proposed Federal Government budget for 2025 aims at N47.9 trillion, with N34.82 trillion being retained for the government, which includes a considerable capital expenditure estimate of N16.48 trillion and new borrowings expected to reach N9.22 trillion.
During the deliberations, Senator Solomon Adeola, chair of the Senate Committee on Appropriations, pointed to the potential of the Compressed Natural Gas (CNG) initiative as a critical factor in reducing the foreign exchange demand, suggesting that this could lead to lower fuel costs for citizens. Statements from other senators reiterated the importance of supporting manufacturing sectors to ensure success for the MTEF’s projections. The discussions highlighted concerns around the current high recurrent-to-capital expenditure ratio, emphasizing the need for a shift toward sustainable economic practices.
Moreover, calls were made for more effective tax contributions from wealthier segments of society, with Senator Jimoh Ibrahim underscoring the significance of transactional taxes to enhance government revenues. The perspective from the Senate suggests a recognition of the existing income inequality in Nigeria, where a significant portion of the population remains outside the tax net. The chairman of the Senate Public Accounts Committee, Senator Aliyu Wadada, lamented discrepancies in tax remittances by NNPCL and the Federal Inland Revenue Service (FIRS). He expressed discontent regarding the lack of transparency in financial inquiries related to the Port Harcourt refinery’s operational status since its recent resumption. This discontent underscores a broader desire for accountability within the nation’s oil sector amidst the ongoing budgetary and economic review processes.
