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The Senate on Tuesday reduced the crude oil benchmark for the 2026 budget to $60 per barrel, adjusting some provisions in the process.
The original proposal in the 2026–2028 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) was $64.85 per barrel.
The country proposes a budget of N54.46 trillion for 2026, as contained in the MTEF forwarded to the National Assembly by President Bola Tinubu.
The government’s retained revenue is estimated at N34.33 trillion, with a new borrowing component of N17.88 trillion. Debt service obligations are expected to consume N15.52 trillion.
Other provisions include N1.376 trillion for pensions, gratuities, and retirees’ benefits, while the fiscal deficit is pegged at N20.13 trillion.
Capital expenditure, exclusive of transfers, is N20.131 trillion, in addition to statutory transfers of N3.152 trillion and a Sinking Fund provision of N388.54 billion.
Total recurrent (non-debt) expenditure is pegged at N15.265 trillion, with special intervention funds for recurrent and capital spending set at N200 billion and N14 billion, respectively.
The Senate approved the MTEF on Tuesday after considering the report of its Committee on Finance, chaired by Senator Sani Musa.
The MTEF outlines the government’s spending plans for the next three years, as required by the Fiscal Responsibility Act, 2007.
In the presidential proposal, $64.85, $64.30, and $65.50 per barrel were fixed for 2026, 2027, and 2028, respectively. However, the Senate approved $60, $65, and $70 per barrel for 2026, 2027, and 2028, respectively.
Defending its decision, the Senate cited political tensions in Europe and the Middle East, which have contributed to an unstable global oil market.
Despite the adjustment in oil prices, the Senate retained the crude oil production projections at 1.84 million barrels per day (mbpd) for 2026, 1.88 mbpd for 2027, and 1.92 mbpd for 2028.
Senators also approved exchange rates of N1,512 to the dollar in 2026, N1,432.15 in 2027, and N1,383.18 in 2028, noting that these figures align with the Central Bank of Nigeria’s (CBN) policy to stabilise the local currency through effective fiscal discipline.
Inflation is projected to moderate steadily over the medium term, with rates of 16.5 per cent in 2026, 13 per cent in 2027, and 9 per cent in 2028.
Real Gross Domestic Product (GDP) growth is projected at 4.68 per cent for 2026, 5.96 per cent for 2027, and 7.9 per cent for 2028, reflecting the impact of ongoing government economic reforms.
The MTEF emphasises the implementation of the new Tax Acts as a driver of economic growth and reform.
The Senate also called on the Federal Government to implement a National Scanning Policy within the National Single Window of the Nigeria Revenue Service, in collaboration with relevant agencies, to improve trade facilitation, reduce leakages, strengthen transparency, and bolster national security.
In 2023, late President Muhammadu Buhari signed a budget of N21.83 trillion, followed by President Bola Tinubu’s initial N28.7 trillion “Renewed Hope” budget for 2024, which eventually rose to about N35 trillion.
In 2025, the country budgeted N54.99 trillion but has only been able to fund 30 per cent of the expenditure plan.
So far, only N10 trillion out of the targeted revenue projection of N40 trillion has been generated, leaving the government with a shortfall of N30 trillion.
According to the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, more than 70 per cent of the 2025 budget will be rolled over to 2026.
John Ameh
