By AWC Fiscal & Economic Desk
President Bola Ahmed Tinubu last Friday, December 19, 2025, presented Nigeria’s ₦58.18 trillion 2026 Appropriation Bill to a joint session of the National Assembly in Abuja, outlining an ambitious economic blueprint designed to consolidate recent reforms and translate macroeconomic gains into tangible development across the country.
The budget—titled the “Budget of Consolidation, Renewed Resilience and Shared Prosperity”—charts the fiscal course for the year ahead amid ongoing efforts to stabilise the economy and improve living standards.
Major Numbers and Fiscal Priorities
The 2026 fiscal framework projects:
- Total Expenditure: ₦58.18 trillion
- Total Revenue: ₦34.33 trillion
- Budget Deficit: ₦23.85 trillion (4.28% of GDP)
- Debt Servicing: ₦15.52 trillion
- Capital Expenditure: ₦26.08 trillion
- Recurrent (non-debt) Spending: ₦15.25 trillion
The projected deficit reflects Nigeria’s ongoing need to balance investment in growth sectors with debt obligations, even as the administration emphasises fiscal discipline and prudent revenue assumptions anchored on conservative oil price and production estimates.
Security and Infrastructure Take Centre Stage
In a marked signal of national priorities, the largest single sectoral allocation—₦5.41 trillion—was assigned to defence and security, underscoring the government’s belief that security is foundational to economic activity and investment in Nigeria. This includes funding for modernisation, intelligence-driven enforcement and enhanced capabilities across agencies.
Infrastructure received ₦3.56 trillion, while education and health were allocated ₦3.52 trillion and ₦2.48 trillion respectively, reflecting a balanced approach to human capital development and long-term competitiveness.
Economic Stability and Reform Anchors
President Tinubu framed the budget as a continuation of the administration’s reform agenda, highlighting positive macroeconomic trends:
- GDP growth of 3.98% in Q3 2025, up from 3.86% the previous year.
- Inflation moderating to about 14.45% in November 2025 after months of decline.
- Foreign reserves rising to roughly $47 billion, a seven-year high.
The President acknowledged that reforms such as the removal of fuel subsidies and exchange rate adjustments have imposed short-term hardships but affirmed that they are necessary for lasting stability, competitiveness and investor confidence.
Agriculture and Food Security
The 2026 budget elevates food security as a national priority, channeling resources toward agricultural mechanisation, irrigation, climate-resilient farming and value chains to reduce post-harvest losses and improve incomes for smallholder farmers—an imperative given Nigeria’s large agrarian workforce and challenges of rural insecurity.
Debt and Fiscal Discipline
Despite the significant size of the budget, debt servicing remains a major fiscal load, consuming roughly 26.7% of total spending. Tinubu stressed stricter budget execution discipline, pledging to eliminate overlapping budgets and close out previous capital liabilities by March 2026—a move aimed at improving planning and accountability.
Deficit, Assumptions and Risks
The projected ₦23.85 trillion deficit is based on conservative assumptions including a crude oil benchmark of US$64.85 per barrel, oil production of 1.84 million barrels per day, and an exchange rate of ₦1,400 to the US dollar.
While prudent, these projections expose the budget to external risks such as oil price volatility and global economic uncertainty, factors that could widen the deficit if revenues fall short.
Analysts’ Take
Economists broadly describe the 2026 budget as a balancing act between stability and transformation. It seeks to sustain macroeconomic gains while addressing long-standing structural gaps in security, infrastructure and human capital development.
Yet the scale of the deficit and heavy debt servicing costs underscore persistent fiscal constraints that could crowd out capital investment if not managed with strict discipline and revenue mobilisation.
What This Means for Nigerians
- Improved security funding could ease insecurity that dampens business and farming activities.
- Enhanced investment in education and health may yield long-term productivity gains.
- Agricultural priorities signal intent to tackle food inflation and rural poverty.
- However, debt pressure and deficits highlight the need for stronger revenue performance and transparent implementation.
Bottom Line:
The 2026 budget represents an ambitious fiscal agenda, balancing reform consolidation with pressing development needs. Success will hinge not only on appropriation but on execution discipline, revenue enhancements from tax reforms and oil sector gains, and accountability in spending—turning numbers on paper into measurable improvements in Nigerians’ daily lives.
