The Federal Government has projected total revenue of N50.74tn for 2026 and set a targeted economic growth rate of 4.68 per cent, even as its proposed fiscal deficit has ballooned to N20.10tn a figure exceeding the entire 2022 national budget by N2.78tn, The PUNCH reports.

The scale of the shortfall suggests the government may borrow 16.1 per cent more than the entire 2022 spending, raising fresh concerns about Nigeria’s mounting debt profile and the sustainability of its medium-term fiscal plans.

The projections were contained in the 2026–2028 Medium-Term Expenditure Framework and Fiscal Strategy Paper, approved by the Federal Executive Council on Wednesday. Minister of Budget and Economic Planning, Atiku Bagudu, who briefed State House correspondents after the meeting, confirmed that the document would be transmitted to the National Assembly on Monday.

Bagudu said the framework was anchored on an oil price benchmark of $64.85 per barrel and an exchange rate of N1,512/$ for 2026. For the first time, the government adopted dual crude production assumptions: a target of 2.06 million barrels per day for the industry and a more conservative 1.8mbpd benchmark for budget planning a 12.6 per cent safety buffer to cushion output disruptions.

He listed expected Federation revenue for 2026 at N50.74tn, with N22.60tn accruing to the Federal Government, N16.30tn to states, and N11.85tn to local governments. Total revenue available to the Federal Government from all sources is projected at N34.33tn, including N4.98tn from government-owned enterprises a figure 16 per cent lower than the 2025 revenue estimate.

The minister highlighted key expenditure components in the proposed N54.43tn spending plan:

• Statutory transfers: ~N3tn
• Non-debt recurrent expenditure: N15.27tn
• Debt service: N15.91tn

Debt servicing is expected to consume 29.2 per cent of the entire budget nearly three out of every 10 naira the government spends in 2026.

The projected N20.10tn deficit accounts for 36.9 per cent of total spending, meaning Nigeria intends to borrow more than one-third of its expenditure next year. For comparison, the current 2025 budget deficit stands at N9.22tn, while the entire amended 2022 budget was N17.32tn.

Debt service has risen sharply from N3.98tn in 2022 to N15.91tn projected for 2026 a jump of about 299 per cent in four years. Recurrent spending has more than doubled in the same period, rising from N7.11tn to N15.27tn, while capital spending continues to lag.

Bagudu added that President Bola Tinubu has secured the backing of the National Economic Council to strengthen coordination between fiscal and monetary authorities and to scale up investment in security infrastructure, including the rehabilitation of training facilities for security agencies. He also disclosed plans to curb revenue leakages in the oil, gas and solid minerals sectors and boost domestic production through the Renewed Hope infrastructure programme.

Economists warn of deepening fiscal stress

Economic experts have raised red flags over the government’s proposal to run a N20tn deficit, warning that unchecked borrowing, unpredictable budget cycles and rising debt obligations could undermine macroeconomic stability in 2026.

The Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, cautioned that Nigeria risks entering a “debt trap” if the deficits continue to expand.

“We need to worry about debt sustainability… high levels of deficits and high levels of debt can choke the fiscal space and lead to a vicious circle of debt,” he said.

Yusuf warned that Nigeria’s fragile recent stability could unravel, resulting in renewed inflationary and exchange rate pressures. He urged the government to leverage improved revenue performance to reduce deficits rather than expand them.

At Olabisi Onabanjo University, economist Prof. Sheriffdeen Tella questioned the credibility of the projections, noting that the 2025 budget had barely begun implementation.

“They have just started implementing the 2025 budget in December 2025. There is no basis for any budget because what they had, they have not implemented,” he said.
He warned that Nigeria risks operating “multiple budgets in the same year,” describing the situation as a sign of fiscal disorder.

The National President of the Nigerian Economic Society, Prof. Adeola Adenikinju, criticised the persistent breakdown of the January–December budget cycle, warning that delayed budget submissions undermine predictability and weaken legislative scrutiny.

“The rush to approve budgets does not allow for proper analysis,” he said, adding that continuous overshooting of deficit limits violates the Fiscal Responsibility Act, which caps the deficit at three per cent of GDP.

Adenikinju warned that increased borrowing from domestic markets would crowd out private-sector investment, raise interest rates and worsen economic hardship.

He also questioned the quality of capital spending, noting that late releases often deprive projects of developmental impact. Persistent borrowing without corresponding growth outcomes, he said, would heighten inflation and further destabilise the currency.

The 2026–2028 MTEF/FSP, a statutory three-year fiscal blueprint, will guide the drafting of the 2026 Appropriation Bill, setting the stage for what analysts predict will be a financially challenging year for Africa’s largest economy.