Month: December 2025

President Bola Ahmed Tinubu has announced that Nigeria will fully transition to a single annual budget cycle starting from April 2026, marking a major shift in the country’s public finance framework aimed at improving planning discipline, budget execution, and fiscal transparency.

The declaration was made on Friday during the presentation of the 2026 Appropriation Bill to a joint session of the National Assembly, where the president outlined what he described as a decisive break from years of overlapping budgets that have complicated fiscal management and weakened accountability across government institutions.

Ending the era of overlapping budgets

Tinubu said the practice of running multiple budgets concurrently—often involving a main budget, supplementary appropriations, and rolled-over capital projects—has distorted planning, delayed capital releases, and undermined transparency across Ministries, Departments and Agencies (MDAs).

“We are terminating the habit of running three budgets in one inflow,” the president said. “By March 31, 2026, all capital liabilities from previous years will be fully funded and closed. From April, Nigeria operates on a single budget, backed by a single revenue cycle. No overlaps, no excuses, no rollovers culture.”

According to the president, the move is part of a broader fiscal reform agenda designed to reset Nigeria’s budget calendar and restore order to public financial management. He explained that the decision to extend the current budget cycle to March 31, 2026, is intended to provide sufficient time to clear outstanding capital obligations inherited from previous fiscal years.

Once these liabilities are settled, Tinubu said Nigeria would be better positioned to return to a cleaner, more predictable single-cycle budgeting framework, where each fiscal year’s revenues and expenditures are clearly defined and fully accounted for within the same period.

Why the reform matters

Analysts have long criticised Nigeria’s budgeting process for its frequent extensions and rollovers, which often result in capital projects being funded across multiple fiscal years without clear timelines or accountability benchmarks. The overlapping approach has also made it difficult for lawmakers and the public to assess budget performance accurately.

By committing to a single annual budget cycle, the administration aims to improve capital project delivery, strengthen oversight, and enhance transparency in how public funds are allocated and spent. Tinubu said the reform builds on ongoing measures such as budget revisions, adjustments to capital targets, and intensified revenue mobilisation efforts.

Background to the decision

The announcement follows a series of legislative and executive actions aimed at realigning Nigeria’s fiscal calendar. Earlier, President Tinubu formally requested the House of Representatives to repeal and re-enact the 2024 and 2025 budgets, alongside a proposal to extend the 2025 budget’s implementation period to March 31, 2026.

In his letter to lawmakers, the president explained that the request sought to repeal the 2024 Appropriation Act of ₦35.06 trillion and re-enact it with a revised total expenditure of ₦43.56 trillion. Under the revised 2024 budget, ₦1.74 trillion was allocated for statutory transfers, ₦8.27 trillion for debt service, ₦11.27 trillion for recurrent expenditure, and ₦22.28 trillion for capital projects, with implementation extended to December 31, 2025.

Tinubu also proposed cutting the 2025 budget from ₦54.99 trillion to ₦48.32 trillion, while extending its lifespan to March 31, 2026. These adjustments were presented as necessary steps to reconcile accumulated obligations and restore coherence to the budgeting process.

In June, the Senate approved a second extension of the implementation period for the 2024 capital component of the national budget, pushing the deadline from June 30, 2025, to December 31, 2025. Earlier, on December 18, 2024, the National Assembly had approved extending the 2024 budget’s lifespan to June 2025.

A shift from recent practice

The January-to-December budget implementation cycle, widely regarded as a hallmark of fiscal discipline, was firmly established during the tenure of the 9th National Assembly. However, repeated extensions over the past two years have gradually eroded that framework, leading to the overlapping cycles Tinubu is now seeking to eliminate.

Last week, the Federal Government further underscored the scale of the challenge by directing MDAs to carry over 70 percent of their approved 2025 capital allocations into the 2026 budget. While officials argued that the directive would reduce waste and duplication, critics said it highlighted how deeply entrenched the rollover culture had become.

Looking ahead

With the declaration of a single budget cycle from April 2026, attention now turns to implementation. Analysts say the success of the reform will depend on strict adherence to timelines, realistic revenue projections, and disciplined capital releases.

If fully executed, the shift could mark a turning point in Nigeria’s fiscal management, improving budget credibility, strengthening oversight, and restoring confidence among investors, development partners, and citizens alike.

The Federal Executive Council (FEC) has approved a ₦58.47 trillion federal budget proposal for the 2026 fiscal year, marking another record-high spending plan as Nigeria grapples with rising development needs, mounting debt obligations, and a fragile macroeconomic environment.

The approval was granted on Friday during a special FEC meeting held in Abuja and was confirmed by Tanimu Yakubu, Director-General of the Budget Office of the Federation, during a post-meeting briefing.

According to Nairametrics, the approval comes just ahead of President Bola Ahmed Tinubu’s formal presentation of the 2026 Appropriation Bill to the National Assembly, setting the stage for legislative scrutiny of what is expected to be one of the most ambitious budgets in the country’s history.

Budget size and overall framework

Yakubu explained that the approved 2026 budget proposal is aligned with the 2026–2028 Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper, which had earlier been reviewed and endorsed by the Council as part of preparations for the new fiscal year.

He stated that the ₦58.47 trillion aggregate expenditure represents about a six percent increase over the 2025 budget estimate, reflecting the government’s intention to sustain spending on critical sectors while managing fiscal pressures.

Within the broader MTEF framework, Yakubu said the core federal budget size stands at ₦54.46 trillion, while retained revenue is projected at ₦34.33 trillion. The difference between projected revenue and planned expenditure implies a sizeable fiscal deficit, which is expected to be financed through a combination of domestic and external borrowing.

The aggregate spending figure also includes ₦4.98 trillion in projected expenditure by government-owned enterprises (GOEs) and ₦1.37 trillion earmarked for grants and donor-funded projects, highlighting the role of state-owned entities and development partners in overall public spending.

Key expenditure components

Breaking down the spending profile, Yakubu said statutory transfers are estimated at ₦4.1 trillion, while debt service obligations amount to ₦15.52 trillion. Included in the debt service figure is about ₦3.39 trillion allocated to the sinking fund, aimed at retiring maturing obligations owed to local contractors and creditors.

Personnel costs, including pensions, are projected at ₦10.75 trillion. This figure incorporates ₦1.02 trillion for government-owned enterprises and represents a seven percent increase compared with the 2025 provision. Overhead costs are estimated at ₦2.22 trillion, reflecting continued efforts to rein in administrative spending despite inflationary pressures.

Yakubu noted that the macroeconomic assumptions underpinning the budget were deliberately conservative and realistic, particularly with respect to oil prices, exchange rate expectations, and projected dividends from government-owned enterprises.

Although total revenue is projected to decline slightly compared with earlier expectations, non-oil revenue is expected to account for roughly two-thirds of total receipts, signalling a gradual shift away from Nigeria’s long-standing dependence on oil income.

Revenue assumptions and macroeconomic benchmarks

Earlier this month, the FEC approved the 2026–2028 MTEF, which sets the fiscal and macroeconomic parameters guiding the budget. The Minister of Budget and Economic Planning, Atiku Bagudu, disclosed that the Federal Government is projecting total revenue inflows of ₦34.33 trillion in 2026, including ₦4.98 trillion expected from government-owned enterprises.

Under the approved framework, oil production is benchmarked at 2.6 million barrels per day for 2026. The oil price benchmark was set at $64 per barrel, while the exchange rate assumption stands at ₦1,512 to the dollar.

These assumptions contrast with those used in the 2025 budget. In December 2024, President Tinubu said the 2025 budget assumed inflation would moderate sharply from 34.6 percent to 15 percent, while the exchange rate was expected to improve from around ₦1,700 per dollar to ₦1,500 per dollar.

In its latest outlook, Standard Bank projected that the naira would close at about ₦1,458.8 to the dollar by December 2025, lending some support to the exchange-rate assumptions used in the 2026 budget framework.

What happens next

With FEC approval secured, attention now shifts to the National Assembly, where lawmakers will debate the budget’s assumptions, spending priorities, and financing plan. Analysts expect discussions to focus heavily on debt sustainability, revenue realism, and the government’s ability to execute capital projects efficiently.

As Nigeria prepares to enter another high-spending fiscal year, the ₦58.47 trillion 2026 budget proposal underscores the balancing act facing policymakers: stimulating growth and development while containing deficits and rebuilding fiscal credibility in an increasingly constrained economic environment.