Senate Backs ₦54.46trn 2026 Budget, Cuts Oil Price Benchmark to $60

Senate Backs ₦54.46trn 2026 Budget, Cuts Oil Price Benchmark to $60

The stage is set for President Bola Ahmed Tinubu to present the 2026 Federal Government budget following the Senate’s approval of the 2026–2028 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP).

The Senate, during plenary, approved a total ₦54.46 trillion 2026 budget, endorsing key fiscal and macroeconomic parameters despite concerns over a massive revenue shortfall recorded in 2025.

Under the approved framework, capital expenditure was pegged at ₦20.131 trillion, recurrent expenditure at ₦15.265 trillion, statutory transfers at ₦3.152 trillion, and Sinking Fund at ₦388.54 billion.

Lawmakers also approved an oil price benchmark of $60 per barrel, revised downward from the executive’s proposed $64.85, alongside projected aggregate revenue of ₦34.33 trillion, a fiscal deficit of ₦20.13 trillion, borrowings of ₦17.88 trillion, and debt service obligations of ₦15.52 trillion.

Other approved assumptions include crude oil production of 1.84 million barrels per day, inflation rate of 16.5 per cent, exchange rate of ₦1,512 to the dollar, and GDP growth rate of 4.68 per cent for 2026.

The approval followed the consideration of a report presented by the Chairman of the Senate Committee on Finance, Senator Mohammed Sani Musa (APC, Niger East). The committee recommended downward adjustments to oil price benchmarks in response to global geopolitical tensions and volatility in the international oil market.

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The Senate also sustained projections for crude oil output, exchange rates and inflation for 2026–2028, citing the Central Bank of Nigeria’s stabilisation policies and ongoing economic reforms. Lawmakers expressed optimism that tax reforms would drive economic growth and improve revenue performance.

The committee further urged the Federal Government to implement a National Scanning Policy under the National Single Window of the Nigeria Revenue Service (NRS) to boost revenue assurance, reduce leakages, enhance transparency and strengthen national security.

Meanwhile, Minister of Finance and Coordinating Minister of the Economy, Wale Edun, disclosed that the Federal Government recorded a significant revenue shortfall in 2025, with actual inflows estimated at ₦10.7 trillion against a projected ₦40.8 trillion.

Speaking before the House of Representatives Committees on Finance and National Planning, Edun attributed the shortfall largely to weak oil and gas revenues, especially Petroleum Profit Tax (PPT) and Company Income Tax (CIT) from oil companies.

Despite the revenue gap, Edun said the government met key obligations, including salaries, statutory transfers, and debt servicing, through prudent treasury management.

He cautioned against rigid expenditure commitments tied to oil revenue projections, urging flexibility in spending plans amid recurring revenue underperformance.

Also speaking, Minister of Budget and National Planning, Atiku Bagudu, said the MTEF/FSP emerged from broad consultations and balanced conservative revenue assumptions with ambitious targets aimed at improving agency performance.

Chairman of the House Committee on Finance, James Faleke, stressed the need for critical scrutiny to prevent bloated budgets and ensure fiscal decisions that would move Nigeria’s economy forward.

Senate Backs ₦54.46trn 2026 Budget, Cuts Oil Price Benchmark to $60