With multiple economic shocks expected to test public finances in 2026, financial analysts and experts yesterday cautioned the Federal Government against fiscal slippages that could widen deficits and erode recent gains and stability recorded in 2025.

They stressed the importance of maintaining stability in monetary policy in order improve the macroeconomic outlook in the New Year.

Speaking at the PwC and BusinessDay executive roundtable on Nigeria’s 2026 budget and economic outlook, held in Lagos, Partner and Tax Reporting & Strategy Lead, Kenneth Erikume, who spoke on the 2026 budget, lamented that Nigeria’s economic growth would likely face serious challenges if the issue of budget deficit, which had been running for consecutive years was not addressed, saying that such situation had resulted into weak revenue performance and delayed capital expenditure.

He noted that while recurrent expenditure had been relatively managed, revenue generation had consistently underperformed.

Capital expenditure in 2025, he noted, suffered from delayed fund releases, forcing the rollover of several 2024 projects and disrupting government-planned investments, warning that such a delay could threaten Nigeria’s broader ambition to achieve a $1 trillion economy.

Erikume submitted that with Nigeria’s public debt estimated at N152 trillion as of mid-2025, the government faced limited fiscal space, hence the need to rely on a combination of borrowing, revenue mobilisation, and efficiency improvements.

Describing the tax reforms as a critical strategy for boosting revenue, he urged the government to deepen tax administration through efficiency, data, and technology, warning that without that sort of reset, it would be impossible to realign timelines disrupted by the budget carryovers from 2024 into 2025.

Beyond the strategies of borrowing and taxes as means of revenue, Erikume advised the Federal Government to accelerate revenue mobilisation through monetisation of public assets as well as expanding private sector participation in infrastructure delivery.

Earlier in his submission, the Chief Economist and West Africa Strategy & Lead, Olusegun Zaccheaus, highlighted seven key issues that would shape the country’s economy in 2026.

These issues include Global dynamics and geopolitics, addressing fiscal sustainability and executing reforms, strengthening monetary policy effectiveness, uneven sectoral growth dynamics, consumer dilemma, domestic security and social stability pressures, and stronger momentum in the emergence of the digital economy and AI.

He said that Nigeria’s macroeconomic indicators were finally beginning to align, as seen with the slowing inflation figures of 15.15 per cent as of December 2025, and the economy expanding at 3.98 per cent as of the third quarter of 2025.