Nigeria’s N54.5 Trillion Budget Plan for 2026: A Dose of Optimism, a Pinch of Skepticism

Nigeria just greenlit its medium-term fiscal framework, laying out budget projections up to 2028. The centerpiece? A proposed N54.5 trillion budget for 2026. At a glance, it paints a picture of economic expansion. Yet, digging deeper reveals some familiar challenges and ambitious assumptions that warrant a closer look.

The government’s projections hinge on an oil price of $64 per barrel and an exchange rate of N1,512 to the dollar for 2026. It also banks on oil production reaching 2.06 million barrels per day, but the fiscal planning will use a more conservative 1.8 million barrels per day. Minister of Budget and National Planning, Mr. Atiku Bagudu, suggests these figures are rooted in meticulous macroeconomic analysis. It’s worth noting the exchange rate forecast factors in the political climate, as 2026 precedes a general election.

Of course, hitting these targets is the big question. Oil prices are notoriously volatile, shaped by global events that are often beyond Nigeria’s control. Similarly, achieving the targeted oil production hinges on resolving issues of pipeline security, infrastructure upgrades, and community relations in the Niger Delta. We’ve seen optimistic projections before, only to be dashed by realities on the ground.

For instance, inflation is projected to average 18% in 2026. While a drop from current levels would be welcome, achieving such a reduction requires strategic intervention and effective monetary policy.

The plan anticipates total revenue to the federation reaching N50.74 trillion in 2026, to be split between the federal, state, and local governments. The federal government anticipates receiving N22.6 trillion. But here’s where the plot thickens: consolidated federal revenue, including income from government-owned enterprises, is projected to be N34.33 trillion. That represents a N6.55 trillion decline compared to 2025. This decline begs the question: Where will the government generate the funds to meet its ambitious spending goals?

Statutory transfers are expected to hover around N3 trillion, while debt servicing is anticipated to consume a whopping N10.91 trillion. Then there’s non-debt recurrent expenditure, which covers personnel costs and overheads, pegged at N15.27 trillion. All this leaves a projected fiscal deficit of N20.1 trillion, or 3.61% of GDP. This is a concerning figure. Nigeria’s debt burden has been a growing concern, and a large deficit could add further strain.

The MTEF anticipates that nominal GDP will surpass N690 trillion in 2026 and climb to N890.6 trillion by 2028, with GDP growth projected at 4.6% in 2026. Non-oil GDP is expected to grow from N550.7 trillion in 2026 to N871.3 trillion in 2028, while oil GDP is estimated to rise from N557.4 trillion to N893.5 trillion over the same period. It signals a move towards economic diversification, which is crucial for long-term stability.

Still, these figures demand some scrutiny. What specific policies will drive non-oil growth? Are investments in infrastructure, technology, and human capital sufficient to unlock the potential of sectors like agriculture, manufacturing, and services? These are the details that will determine whether these projections become reality.

It’s a mixed bag. On one hand, the government is setting ambitious targets and outlining a path towards economic expansion. On the other, achieving these goals requires navigating significant hurdles, including volatile oil markets, infrastructure deficits, security challenges, and a growing debt burden.

From my experience, successful budget implementation hinges on transparency, accountability, and efficient resource management. Nigeria must strengthen its institutions, curb corruption, and prioritize investments that generate sustainable growth and create jobs. If not, this N54.5 trillion plan risks becoming just another set of optimistic projections that fail to deliver tangible benefits to the Nigerian people.

To that end, let’s see how these plans evolve. The road ahead is filled with both opportunities and obstacles, and the government’s ability to navigate this complex landscape will ultimately determine Nigeria’s economic trajectory.