The federal government says it is adopting innovative financing strategies to address the projected N14 trillion budget deficit for the 2025 fiscal year.
Minister of Budget and National Planning, Atiku Bagudu made this known on Monday, while speaking on the 2025 KPMG Arise TV Budget News Day on Arise TV.
He highlighted the administration’s strategy for debt management and revenue mobilisation, which he said was targeted at ensuring that the country maintains fiscal stability while avoiding excessive reliance on the Central Bank of Nigeria (CBN) for deficit financing.
According to him, under no circumstances would the CBN provide financing beyond its legal limit of 5 per cent of the previous year’s revenue, in line with the legal requirements.
Bagudu emphasised that the government would rather prioritise market-driven approaches to raise funds.
“On the deficit, we are looking at N14 trillion. Given what we have seen in the innovative approach to financing, first, because you don’t have a Central Bank of Nigeria that will be going beyond the legal bit of 5%, we are looking at market solutions. We are going to the market in different ways using innovative financing techniques,” the minister stated.
Explaining further, he stated that to bridge the funding gap, the government was exploring local bond issuances and other structured financial instruments that will allow it to raise capital from investors while ensuring sustainability in debt servicing.
“Innovative approaches such as local bonds have been issued, allowing the government to raise money efficiently. This represents a strong statement of intent, ensuring that those whom we have borrowed from remain confident in our ability to meet debt obligations,” Bagudu explained.
The minister also expressed optimism that economic conditions would continue to improve in 2025, potentially reducing the need for extensive debt servicing.
“If, as we anticipate, economic conditions continue to improve, we may not need to spend as much on debt servicing as previously projected,” he added.
The minister reaffirmed the President Bola Tinubu administration’s commiment to fiscal responsibility, with a strong focus on revenue generation through tax reforms, public-private partnerships (PPPs), and investment in productive sectors.
