CONTENTS

1. 2025 BUDGET

2. OIL PRICES

3. FOOD INFLATION

4. FINANCIAL LITERACY

2025 BUDGET

FEC Proposes N47.9 Trillion Budget for 2025 Fiscal Year

The Federal Executive Council (FEC) has unveiled a proposed budget of N47.9 trillion for the 2025 fiscal year. Atiku Bagudu, the Minister of Budget and Economic Planning, made this announcement following the FEC meeting chaired by President Bola Tinubu on November 21st, 2025.

Bagudu revealed that the council had approved the Medium-Term Expenditure Framework (MTEF) for 2025-2027, which includes several key fiscal assumptions. The government has set the crude oil benchmark at $75 per barrel, with a target oil production of 2.06 million barrels per day (bpd). The budget also projects an exchange rate of N1,400 per dollar and aims for a GDP growth rate of 6.4%.

Budget Overview and Fiscal Strategy

Bagudu emphasized that the fiscal projections are conservative to ensure careful monitoring, despite expectations that actual performance may exceed these targets. The proposed N47.9 trillion budget will require new borrowings of N9.2 trillion to cover the 2025 budget deficit.

The minister outlined several strategic priorities, including sustaining the deregulation of petroleum prices and the exchange rate and urging the Nigerian National Petroleum Corporation (NNPC) Limited to reduce its oil and gas production costs. Additionally, the government is considering amendments to the Petroleum Industry Act of 2021 to address potential risks to the Federation.

The FEC also approved the submission of the MTEF and fiscal strategy paper to the National Assembly, as required by the 2007 Fiscal Responsibility Act. This submission is complemented by other important bills under consideration in the National Assembly, including economic stabilization and tax reform measures. Bagudu expressed confidence in strong economic growth for 2025.

Proposed 2025 Budget Breakdown

• Total Revenue Target: N34.8 trillion, comprising:
  • Oil Revenue: N19.6 trillion
  • Non-oil Taxes (FG share): N5.7 trillion
  • Net Revenues from Government-Owned Enterprises (GOEs): N2.87 trillion
  • Independent Revenue: N3.6 trillion
  • Other Revenues: N4.8 trillion
• Total Expenditure Target: N47.9 trillion, including:
  • Recurrent (Non-Debt) Expenditure: N14.2 trillion
  • Capital Expenditure: N16.4 trillion
  • Debt Service: N15.38 trillion
  • Other Expenditures: N2 trillion

The budget deficit for 2025 is projected at N13.08 trillion, a rise from the estimated N9.18 trillion deficit in 2024. This represents about 38% of total federal government revenues and 3.87% of GDP. The increase in the deficit is attributed to the new minimum wage, pension obligations, other adjustments, and rising debt service costs.

Context: 2024 Budget and Deficit Overview

For comparison, the 2024 budget was set at N27.5 trillion (approximately $36.7 billion at the exchange rate of N1/$700) under the theme “Renewed Hope.” However, the 2024 budget also faced a significant deficit of N9.18 trillion ($12.2 billion), signalling the government’s need to rely on borrowing and external financing.

Key components of the 2024 budget included:

• Projected Revenue: N18.32 trillion ($24.4 billion at N1/$700)
• Oil Revenue: N7.68 trillion, which was highly sensitive to fluctuations in global oil prices and production volumes.

Despite these challenges, figures for 2024 show a budget deficit of 7.6% of GDP by August 2024, exceeding the targeted 3.8%. The federal government plans to issue foreign currency-denominated bonds to help finance this gap.

OIL PRICES

Dangote Refinery Cuts Petrol Price to N970 Per Liter for Marketers

The Dangote Group has announced a reduction in the price of its Premium Motor Spirit (PMS) to N970 per liter for marketers. The price cut, which lowers the previous rate of N990 per liter, was confirmed in a statement issued by Anthony Chiejina, the Group’s Chief Branding and Communications Officer, on Sunday.

Chiejina stated that the refinery’s move to slash the price by N20 per liter is aimed at supporting marketers while maintaining the high quality of Dangote’s products. He emphasized that despite the price adjustment, the company remains committed to delivering environmentally friendly and sustainable petroleum products.

Dangote Refinery’s official statement on price reduction reads:

“Dangote Petroleum Refinery has reduced the price of Premium Motor Spirit (PMS) from N990 per litre to N970 for marketers. As the year draws to a close, this is our way of appreciating Nigerians for their steadfast support, which has been key in making the Refinery a reality. We also extend our gratitude to the government for their continued support in promoting domestic enterprise for the benefit of all.

“While we remain unwavering in our commitment to maintaining the highest standards, we assure you that our products will continue to be of the best quality, environmentally friendly, and sustainable. We aim to continually ramp up production to meet and exceed domestic fuel consumption needs, thereby eliminating any fears of supply shortfalls.”

Background on the Price Reduction

The recent price reduction by Dangote Refinery comes amidst ongoing tensions between the refinery and some petroleum marketers regarding pricing.

• The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) had previously criticized Dangote Refinery for selling petrol at a higher-than-expected price, claiming that imported petrol could be cheaper. PETROAN described the N990 price as inconsiderate, with their National Public Relations Officer, Joseph Obele, emphasizing the need for healthy competition in the sector to prevent price exploitation.
• In response, PETROAN refuted Dangote’s claims that they planned to import substandard petrol at a lower price. Obele confirmed that PETROAN had finalized arrangements with foreign refinery partners to import high-quality PMS and sell it at a price lower than what is currently available in Nigeria.

Dangote Refinery has denied these claims, suggesting that significantly lower prices may indicate compromised product quality or even oil theft.

Collaboration with IPMAN

Meanwhile, the Independent Petroleum Marketers Association of Nigeria (IPMAN) has reached an agreement with Dangote Refinery to purchase petroleum products directly from the refinery. This partnership is expected to help stabilize the market and address ongoing concerns within the sector.

The price reduction to N970 per litre is seen as a strategic move by Dangote Refinery to build stronger relationships with marketers and mitigate criticisms over petrol pricing.

FOOD INFLATION

 

Food Inflation

Nigeria’s inflation rate increased for the second consecutive month in October 2024, reaching a four-month high of 33.9%, up from 32.7% in September. The rise was largely driven by surging food prices, higher energy costs, and continued volatility in the foreign exchange markets. Food inflation, which constitutes the largest portion of Nigeria’s inflation basket, accelerated to 39.2% in October, up from 37.8% in September. This was largely due to reduced agricultural output caused by severe flooding and ongoing challenges in key farming regions.

Transportation inflation also rose to 29.3%, fueled by higher petrol and gas prices following the removal of fuel subsidies. Meanwhile, inflation in housing and utilities edged up to 28.8%, from 28.6% in September, reflecting increased electricity tariffs. Core inflation, which excludes the often-volatile prices of food and energy, surged to a record high of 28.4% in October, compared to 27.4% the previous month.

On a month-to-month basis, consumer prices rose by 2.6%, slightly up from a 2.5% increase in September.

FINANCIAL LITERACY

Budgeting Basics

As we head into the holiday season, it’s important to maintain financial stability. Let’s focus on fundamental financial skills:

1: Track Your Spending

• Use a budgeting app: Tools like Mint or YNAB can help you categorize expenses.
• Manual tracking: A simple spreadsheet or notebook can work just as well.
• Review bank and credit card statements: Identify recurring expenses and potential areas for savings.

 2: Set Realistic Goals

• Short-term goals: Consider holiday shopping, emergency funds, or vacation savings.
• Long-term goals: Think about retirement, homeownership, or children’s education.
• Break down large goals: Divide them into smaller, achievable steps.

3: Create a Budget

• Income: List all sources of income, including salary, side hustles, and investments.
• Expenses: Categorize expenses into fixed (rent, utilities) and variable (groceries, entertainment).
• Allocate funds: Assign a budget to each category based on your income and goals.

4: Adjust and Adapt

• Review your budget regularly: Life changes, so your budget should too.
• Be flexible: Unexpected expenses happen. Adjust your budget accordingly.
• Celebrate successes: Reward yourself for sticking to your budget.

5: Rebalance Your Portfolio: Review your investment portfolio and rebalance if necessary. This helps manage risk and aligns your investments with your financial goals.

6: Maximize Retirement Contributions: If you’re still working, make sure to fully fund your   retirement accounts before the year ends. This can provide tax benefits and help secure your future.

7: Review Your Insurance Coverage: Evaluate your insurance needs for 2025 and make any necessary adjustments. This includes health, life, and property insurance.

8: Build or Reinforce Your Emergency Fund: Ensure you have an emergency fund that covers at least 3-6 months of living expenses. This can provide a safety net in case of unexpected expenses.

9: Pay Down Debt: Focus on paying down high-interest debt, such as credit card debt, to reduce interest costs and improve your financial health.

10: Set Clear Financial Goals: Define your long-term financial objectives and create a plan to achieve them. This can help you stay motivated and focused.

11: Educate Yourself: Stay informed about financial trends and policies by following financial  news and using educational resources like books, online courses, and workshops.

12: Plan for the Unexpected: Consider potential unexpected expenses and plan for them in your budget. This can help you avoid financial stress in the future.

13: Maximize End of Year Rewards: If you use credit cards, make sure to maximize rewards and benefits by using them strategically and paying off balances in full each month.

Additional Tips

• Avoid impulse purchases: Take a pause before buying something you don’t need.
• Cook at home: Eating out can be expensive. Prepare meals at home to save money.
• Shop smart: Use coupons, compare prices, and buy generic brands.
• Automate savings: Set up automatic transfers to your savings account.
• Seek professional advice: Consider consulting a financial advisor for personalized guidance.

Conclusion

By following these tips, you can take control of your finances , improve your financial health and set yourself up for a successful 2025. Stay committed, be patient, and enjoy the journey to financial freedom. Welcome to the Merry Month!

SOURCES:

Source: Nairametrics, Businessday, NBS, Google images, Freepik, Google

DISCLAIMER

This publication is produced by Centrum Finance Company Limited solely for the information of users who are expected to make their own investment decisions without undue reliance on any information or opinions contained herein. The opinions contained in the report should not be interpreted as an offer to sell, or a solicitation of any offer to buy any investment. Whilst every care has been taken in preparing this document, no responsibility or liability is accepted by any member of the Company for actions taken because of the information provided in this publication.