Economic analysts describe the Federal Government’s proposed 2026 budget as more grounded than earlier fiscal plans, even as rising debt servicing obligations remain a major pressure point. Their assessment follows the approval of the Medium-Term Expenditure Framework and Fiscal Strategy Paper by the Federal Executive Council.
The spending plan is built on a N54.43 trillion envelope, with assumptions that analysts consider more aligned with current conditions: an oil benchmark of $64.85 per barrel, an exchange rate of N1,512 to the dollar, and projected revenue of N34.33 trillion. The forecast also includes GDP growth of 4.68 percent and two oil production scenarios, 2.06 million barrels per day and a lower 1.80mbpd for budgeting.
Experts say the shift represents a more cautious approach than previous years, which relied heavily on overly optimistic projections. BudgIT’s deputy country director, Vahyala Kwaga, said the assumptions appear modest and the tax reforms could strengthen revenue, though he questioned the jump in nominal GDP from about N360 trillion to N690 trillion.
Other analysts argue that implementation will determine the budget’s success, particularly in managing debt, boosting revenue, and diversifying foreign exchange sources. They warn that shocks, political instability, or revenue shortfalls could disrupt execution.
Muda Yusuf of the Centre for Promotion of Private Enterprises said oil price assumptions underpin budget credibility. He described the GDP growth target as reasonable but emphasised that revenue, not GDP, determines feasibility. He said the new tax reforms could improve revenue if the year proceeds without major disruptions.
He warned that the projected N15.91 trillion debt servicing cost could consume nearly half of expected revenue, creating vulnerability if earnings weaken.
Public affairs analyst Mojeed Dahiru stressed that the real challenge remains Nigeria’s dependence on crude oil for foreign exchange. He said budgets consistently encounter trouble because oil prices and production are outside the country’s control. He argued that sustainable revenue requires investments in export-competitive enterprises that can earn foreign exchange and reduce exposure to oil volatility.
