2026 budget ambitious but unviable

Civic tech organisation BudgIT has raised concerns about the Nigerian Government’s 2026 budget, calling it “ambitious, but unrealistic” and unviable.

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The organisation noted in a statement on Monday that, with revenue projected at N36.9 trillion and expenditure at N68.3 trillion, the country will contend with a fiscal deficit of N31.5 trillion this year, equivalent to 6.4 per cent of the gross domestic product.

That is more than twice the 3 per cent limit permitted by the Fiscal Responsibility Act.

“In practical terms, the government can only finance 53.9 per cent of its budget from actual revenues, leaving 46.1 per cent dependent on borrowing and loans,” it said.

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“One can reasonably infer a structural fiscal imbalance that has, despite several warnings from observers, become embedded in Nigeria’s fiscal framework.”

Nigeria hopes to execute its biggest spending plan ever this year, financing it through a blend of revenue and borrowing.

President Bola Tinubu originally proposed a budget of N58.5 trillion to the legislature, which was later revised upward to N68.3 trillion after he requested an expansion of N9.1 trillion.

The adjustment, the president said, is intended to cater for pending capital projects from previous budget cycles and prevent unsettled obligations from affecting the 2026 fiscal programme.

The country has underperformed its revenue projections for years, usually falling short of targets by more than 30 per cent, a trend that has raised concerns about the fiscal framework.

“The key issue is implementation, and reforms are central to improving revenue mobilisation and execution capacity,” Muda Yusuf, the chief executive officer of the Centre for the Promotion of Private Enterprise, said in April.

BudgIT, which seeks to promote transparency and accountability in Nigeria’s public finance, stated that the N36.9 trillion revenue projection does not appear realistic, given the country’s heavy reliance on oil revenues and the uncertain gains from tax reforms.

It also disclosed that, while the 47.1 per cent increase in capital expenditure to N32.3 trillion indicates a commitment to infrastructure expansion and long-term growth, the plan is constrained by the burden of debt obligations.

Debt service is expected to gulp N15.8 trillion of the budget, which is about 45 per cent of the target revenue and 23 per cent of total expenditure.

BudgIT added that debt service could create a tight fiscal space, leaving a large chunk of government earnings pre-committed and inhibiting investments in critical sectors.

Between 2021 and 2025, total public debt surged from N33.1 trillion to N159.3 trillion, marking a 380.9 per cent increase.

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“Overall, the 2026 budget reflects a government attempting to balance growth ambitions with fiscal realities but hemmed in by structural inefficiencies (weak growth, low productivity, weak currency, low export diversification, a challenging logistical environment, etc.),” BudgIT stated.

“The numbers point to an unambiguous conclusion: Nigeria’s challenge is not just revenue generation, but revenue realism, expenditure discipline, sound debt management and institutional credibility.”