Economists have offered a mixed verdict on President Bola Ahmed Tinubu’s proposed N58.47 trillion budget for the 2026 fiscal year, praising its improved structure and sectoral priorities while warning that revenue assumptions, debt servicing costs and implementation risks could undermine outcomes.
President Tinubu presented the proposal to a joint session of the National Assembly on Friday. The budget allocates the largest share to Defence and Security at N5.41 trillion, followed by Infrastructure (N3.56 trillion), Education (N3.52 trillion) and Health (N2.48 trillion).
The framework is built on projected revenue of N34.33 trillion, total expenditure of N58.18 trillion and debt servicing estimated at N15.52 trillion. Core assumptions include an oil price benchmark of $64.85 per barrel, daily crude production of 1.84 million barrels and an exchange rate of N1,400 to the dollar. If approved, the 2026 proposal would represent a sharp rise from the N43.56 trillion and N54.99 trillion budgets of 2024 and 2025 respectively.
Speaking separately to DAILY POST, Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, said the 2026 budget is more coherent and conservative than previous ones, especially compared to the 2025 framework.
However, Yusuf cautioned that the oil price and production targets remain optimistic when measured against Nigeria’s historical performance. He suggested a downward adjustment to strengthen credibility and reduce the risk of revenue shortfalls.
He also urged lawmakers to avoid inflating the proposal through constituency projects, warning that frequent upward revisions have in the past weakened implementation and eroded public confidence.
According to Yusuf, persistent underperformance of non-tax revenues by government agencies remains a major weakness, stressing the need for stronger enforcement and optimisation. While acknowledging the administration’s push for fiscal consolidation, he expressed concern that debt servicing is consuming almost half of projected revenue, leaving limited fiscal space for development.
Yusuf further called for clarity on how the proposed 2026 budget would be reconciled with the recently re-enacted 2025 Appropriation Act, warning that overlapping budget regimes could complicate execution.
He noted that while recurrent spending is usually implemented, poor capital budget performance continues to blunt the economy’s growth impact. Beyond the federal government, Yusuf stressed that state and local governments—now managing significantly larger budgets—must also be held accountable for development outcomes in sectors such as health, education, infrastructure and agriculture.
On his part, the CEO of SD & D Capital Management, Gbolade Idakolo, described the N58.46 trillion proposal as a bold attempt to consolidate recent fiscal reforms, even as a substantial portion of capital expenditure is expected to roll over into 2026.
Idakolo welcomed the strong emphasis on security, arguing that improved safety is critical to investor confidence and economic stability. He also praised the substantial allocations to infrastructure, education and health, noting that these sectors are central to job creation, productivity and human capital development.
According to him, the budget could help stabilise and grow the economy if fully implemented with timely release of funds. He, however, advised the National Assembly to rigorously scrutinise all projections and allocations to ensure realism and prevent implementation gaps.
Overall, analysts agree that while the 2026 budget shows clearer priorities and improved structure, its success will depend on realistic assumptions, disciplined legislative review and effective execution across all tiers of government.
Discover more from NATIONAL BEAM
Subscribe to get the latest posts sent to your email.
