Nigeria’s Senate has approved the 2026-2028 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP), with a notable adjustment to the oil price benchmark. Lawmakers reduced the projected oil price for 2026 from $64.8 to $60 per barrel, citing global geopolitical tensions and crude oil price volatility. This revision reflects a cautious approach to revenue forecasting in an unpredictable international market.

Despite the adjustment to the oil price benchmark, the Senate retained all other key projections and parameters within the MTEF and FSP. This includes the proposed domestic crude oil production levels, which are set at 1.84 million barrels per day for 2026, rising to 1.92 million barrels per day by 2028. The lawmakers expressed confidence in ongoing efforts to stabilize oil output.

The Senate also endorsed the macroeconomic assumptions for the medium term, projecting an exchange rate of N1,512 to the dollar in 2026, N1,432.15 in 2027, and N1,383.18 in 2028. These figures align with the Central Bank of Nigeria’s objective to stabilize the naira through coordinated fiscal and monetary policies. Inflation is expected to decrease steadily, from 16.5% in 2026 to 9% in 2028.

Real Gross Domestic Product (GDP) growth projections were sustained at 4.68% for 2026, climbing to 7.9% by 2028. These optimistic forecasts are underpinned by ongoing economic reforms and the anticipated positive impact of tax reforms expected to gain traction from 2026. The effective implementation of newly enacted Tax Acts is considered a crucial driver for economic expansion.

The approved fiscal framework for the 2026 federal budget outlines a total expenditure of N54.46 trillion. Within this, retained revenue is estimated at N34.33 trillion. A significant component of the framework is the planned new borrowings, both domestic and foreign, which are set at N17.88 trillion. Debt service obligations are projected to reach N15.52 trillion.

Further details of the fiscal operations include provisions for pensions and retirees’ benefits amounting to N1.376 trillion. The fiscal deficit is pegged at N20.13 trillion. Capital expenditure, excluding transfers, is maintained at N20.131 trillion, alongside statutory transfers of N3.152 trillion and a sinking fund provision of N388.54 billion. Recurrent expenditure, excluding debt, is approved at N15.265 trillion, with special intervention funds allocated for both recurrent and capital spending.

Senate President Godswill Akpabio commended the Finance Committee for their diligent work, describing the approved framework as a vital platform for President Bola Ahmed Tinubu to present the 2026 budget before the end of the year. The committee expressed optimism that the diligent implementation of these recommendations will foster sustainable economic prosperity in Nigeria.

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Keywords: Nigeria Senate, MTEF FSP, 2026 budget, oil price benchmark, domestic borrowing, foreign borrowing, fiscal strategy, GDP growth, inflation projections, exchange rate