• Fiscal deficit may hit N35 trillion
• N5.71 trillion 2025 capital obligations rolled over
• Execution of 2026 capital projects extended to June 30

After three weeks of hesitation, the two chambers of the House of Assembly, yesterday, passed a total fiscal plan of N68.3 trillion – about 17 per cent increase on the initial proposal – passing the heavy burden of implementation to the executive.

The passage came three months after it was presented by the executive. If the President appends his signature this week, marking the beginning of the second quarter (Q4) and implementation starts straightaway, the budget cycle would effectively shift to April-March.

Implementation of the 2025 budget did not take off fully till September, stoking controversy about the current administration’s commitment to protecting the sanctity of budget culture.

For its poor implementation, the President had sought approval to consolidate and re-enact the 2024 and 2025 appropriations, a request that was not only alien to the country’s fiscal tradition but also raised questions about how the 2026 plan would sit in the new framework.

If President Bola Tinubu assents to the bill as passed, the figure will be over 24.2 per cent above last year’s N54.99 trillion spending plan, perhaps one of the worst-performing appropriations in recent history.

The last-minute adjustment to the document, which was earlier approved by the lawmakers, exposes the crisis of execution and the desperation to make up for the hole created by poor implementation in infrastructure investment.

The President had requested the parliaments to approve an additional N9.3 trillion to regularise outstanding legacy capital projects carried over from previous budget cycles and ensure their completion. The additional spending is also meant to support key transport infrastructure projects.

Posers about budget funding amid history of fiscal recklessness
With or without appropriation, the government faces a Herculean task this year, being a campaign period. With a potpourri of politically-motivated projects across the country demanding execution, the President will not only be under pressure to deliver on recurrent expenditure items but will also be in a hurry to deliver on critical capital line items.

But the planned fiscal expansion has raised concerns about the government’s commitment to the long-awaited fiscal consolidation. On paper, the original appropriation planned for a fiscal deficit of N23.85 trillion against an oversized revenue target of over N34 trillion.

By every standard, a deficit-to-revenue ratio of 70 per cent is high for a country with huge legacy debt burdens. Historically, revenue projections have underperformed by an average of 30 per cent, according to The Guardian’s independent data analysis.

A 30 per cent underperformance could create an additional deficit gap of N10.2 trillion, a possibility that could push the total fiscal deficit to as much as N34 trillion, part of which may be unfunded.

In 2024, the Federal Government recorded revenue of N20.98 trillion or about 60 per cent of the actual expenditure estimated at N34.49 trillion, resulting in a deficit of N13.58 trillion. As of the first half of last year, the fiscal deficit was N5.7 trillion. Though much of the capital budget expenditure was funded with the rollover of 2024 revenue.

If the government braves the odds to mobilise resources to run a clean budget, as it may be tempted to do for political exigency, it could expand the sovereign debt to N200 trillion – a discussion that may be a major issue at next year’s general election.

The Senate had approved an aggregate expenditure of N68.32 trillion, following the adoption of a set of presidential proposals that expanded the budget.

The approved budget comprises N32.29 trillion for capital expenditure, N15.43 trillion for recurrent spending, N15.81 trillion for debt servicing and N4.8 trillion for statutory transfers, making it one of the largest fiscal plans in the country’s history.

The capital component reflects the administration’s strong emphasis on infrastructure development, while the substantial allocation for debt servicing highlights the continuing pressure of Nigeria’s debt obligations on public finances.

Recurrent expenditure remains significant, covering personnel and administrative costs, while statutory transfers will fund key institutions, including the judiciary and other constitutionally-backed bodies.

The budget approval comes alongside the Senate’s consideration of sweeping adjustments requested by President Bola Ahmed Tinubu aimed at addressing outstanding capital commitments and funding strategic national projects.

Budget breakdown
A major component of the adjustment is the inclusion of N5.71 trillion in legacy capital obligations carried over from the 2025 fiscal cycle, alongside N2 trillion earmarked for priority projects across key sectors. The move is intended to prevent delays in project execution and ensure continuity in government programmes, the executive explained.

The President also proposed several strategic interventions across infrastructure, health and governance.

Under the Ministry of Finance Incorporated (MOFI) framework, the government is proposing N478.6 billion in equity contributions for light rail projects in Lagos, Kano, Kaduna and Ogun states, as well as feasibility studies for rail projects in Enugu and Maiduguri and expansion of the national rail network.

It also proposes N8.96 billion for feasibility studies on the Calabar–Maiduguri Corridor and the Maiduguri–Sokoto Superhighway, part of a broader infrastructure expansion plan.

In the judiciary, N98.5 billion has been proposed for the Court of Appeal, N36.7 billion for the Supreme Court and an additional N268.54 billion to strengthen the judiciary’s budget ceiling and support new judicial appointments ahead of the 2027 general elections.

To finance the expanded budget, the federal government is relying on a mix of revenue enhancements and borrowing. An increase in the oil benchmark by $10 per barrel is expected to generate N2.592 trillion, while reforms in the telecommunications sector are projected to boost tax revenues, with major operators such as MTN Nigeria and Airtel Nigeria expected to contribute about N874 billion in corporate income tax.

The government also plans to raise an additional N6.163 trillion through external borrowing to bridge the funding gap.

With the provisions, the 2026 budget is positioned as a key policy instrument for advancing infrastructure, strengthening institutions and supporting economic growth, the government said, even as concerns persist over debt sustainability and fiscal balance.
Senate clarifies budget rationale

The Chairman of the Senate Committee on Appropriation, Olamilekan Adeola Solomon, had provided clarifications on the rationale behind the increase in the 2026 appropriation, bringing the total budget to N68.323 trillion.

Speaking on the floor of the National Assembly and during interactions with journalists, Adeola explained that the adjustment was made after the executive formally requested additional provisions to address emerging national priorities and funding gaps in critical sectors.

According to him, the President initially presented a N58.47 trillion budget to the National Assembly in December 2025. However, following joint deliberations by both chambers of the legislature, lawmakers approved an increase of about N9 trillion after carefully reviewing requests submitted by the executive.

Adeola emphasised that the process was transparent and followed due legislative procedure, noting that all additions were backed by formal correspondence from the executive and subjected to scrutiny by the Senate and the House of Representatives.

He explained that the revised budget aligned with Tinubu’s Renewed Hope Agenda, describing it as a “budget of consolidation” aimed at sustaining ongoing reforms and strengthening the economic recovery efforts.

Addressing concerns about the size of the increase, Adeola said the National Assembly was aware of public scrutiny and ensured that every component of the additional expenditure was justified. He added that the legislature acted responsibly to prevent any disruption to government operations.

The House of Representatives had earlier approved the N9.3 trillion increase requested by Tinubu, pushing the spending envelope to N68.3 trillion.

The President’s request was conveyed in a letter read during plenary by the Speaker, Tajudeen Abbas, after lawmakers resumed from the Eid-el-Fitr break.

Following consideration by the House Committee on Appropriations, chaired by Abubakar Bichi, lawmakers approved the revised figures and passed the budget.

In a related development, the House also passed a bill extending the implementation of the capital component of the 2025 budget to June 30 to allow ongoing projects more time for completion.