…Economists criticize N'Assembly for poor oversight
The federal government's 2026 budget outlook has highlighted rare and wide divisions within the National Assembly, as lawmakers sharply disagreed on the revenue assumptions underpinning the 2026-2028 medium-term expenditure framework (MTEF).
Experts have warned that the proposed N54.46 trillion spending plan, which relies heavily on borrowing estimated to exceed 30 per cent of the 2026 budget, underlines persistent fiscal imbalances and weak legislative oversight of federal borrowings.
Economists have warned that the proposed N54.46 trillion spending and financing plan could deepen the country's debt trap, with borrowing expected to exceed 30 per cent of next year's budget and legislative oversight of federal borrowings coming under fresh scrutiny.
Economists say the Senate-approved framework reflects worsening fiscal conditions, driven by low oil revenue expectations and deepening deficits.
Under the MTEF/Fiscal Strategy Paper (FSP) passed on Tuesday, the oil price benchmark was revised to $60 a barrel in 2026, $65 in 2027 and $70 in 2028, with crude output forecast between 1.84 million barrels per day (bpd) and 1.92 million bpd.
Inflation is projected to decline from 16.5 percent in 2026 to nine percent by 2028, while real gross domestic product (GDP) growth is projected to accelerate to 7.9 percent, mainly due to anticipated tax reforms.
The 2026 budget framework proposes total expenditure of N54.46 trillion against retained revenue of N34.33 trillion, resulting in a deficit of over N20 trillion. The planned new borrowing of N17.89 trillion, with debt service costs of about N15.9 trillion, highlights Nigeria's increasing dependence on debt financing.
Also read: Representatives postpone consideration of budget planning documents as lawmakers disagree over revenue assumptions
heavy dependence on borrowing
Paul Alaje, chief economist at SPM Professionals, said the framework sends clear signals of declining oil revenues and heavy reliance on borrowing.
“Expected crude oil sales are at 1.8 million barrels versus the two million barrels expected for the current year,” he said, adding that oil price sentiments have also declined sharply. “When you lower both price and production estimates, your total revenue is expected to be lower.”
Alaje said the resulting gap would inevitably be filled through higher taxes or new loans. While government projections suggest optimism about tax reforms, he argued that Nigeria's fiscal history points in a different direction.
“Perhaps, the government is expecting revenue from taxes to come in next year, but if that is not the case, the government can borrow to finance the rest,” he said.
He said the MTEF already shows borrowing accounting for more than 30 percent of the financing for the 2026 budget, warning that in practice the figure could be higher.
According to him, successive budgets have failed to meet revenue targets, making deficit financing through debt a recurring pattern.
He described Nigeria's fiscal pattern as one of repeated revenue shortfalls and rising debt, saying, “Over the years, we have never been able to meet our budgetary expectations. It's a ritual.”
In addition to borrowing, Alaje warned that capital spending could fall to its lowest level in recent years, further weakening growth prospects.
He argued that the outlook indicates that capital expenditure could remain below 25 per cent of total expenditure, limiting the economy's ability to generate revenue in the future.
The result, he said, is a self-reinforcing cycle in which debt grows faster than the economy, forcing either higher taxes or continuing to borrow to survive. He said, “This means that we will continue to be in debt. It simply means that the debt will keep revolving.”
While acknowledging the government's expectations over the new tax laws, Alaje urged caution, saying it was too early to assume improvement in revenue performance.
“I would wait for implementation to begin,” he said, arguing that the first quarter (Q1) of 2026 will be crucial in determining whether expectations are realistic.
Sherifeddine Tella, a development economist, took a more critical approach, questioning the logic of repeated borrowing when previous budgets were poorly implemented.
“They will run into losses and then ask for loans,” he said. “While last year's budget had not even been implemented, they were asking for loan after loan.”
Tella said Nigeria is already paying heavily for loans borrowed years ago, with debt service crowding out development spending. “The money that used to be spent on development is now being used to service debt,” he said, warning that the burden was being passed on to future generations.
He argued that the country's fiscal problem lay in revenue shortfalls rather than governance failures and leakages. “Our problem is not that we don't have money. It's that there are too many leakages, too much corruption,” he said, stressing that repeated borrowing appears to have little effect. According to him, Nigerians rarely see clear evidence of what the loans are used for, even as the government owes domestic contractors.
Tella was particularly critical of legislative oversight, saying that the National Assembly had failed to adequately scrutinize loan requests. “It is unfortunate that members of the National Assembly are passing loan requests without warning the government that they should stop them,” he said, arguing that lawmakers should demand accountability for already approved borrowings before granting new loans.
Senate, Representatives divided
Divisions were also evident within the National Assembly.
In contrast to the Senate's approval of the framework, the House of Representatives on Wednesday suspended consideration of the MTEF/FSP after lawmakers clashed over proposed changes in crude oil price assumptions and their implications for revenues and borrowing.
Disagreements emerged during the plenary session following the presentation of reports by the Joint Committees on Finance and National Planning and Economic Development.
The committees recommended lowering the 2026 oil benchmark to $60 a barrel, a move that raised concerns among lawmakers over the potential revenue impact. While the Executive had estimated benchmark prices of $64.85, $64.30 and $65.50 per barrel for 2026, 2027 and 2028 respectively, the committee recommended reducing the 2026 benchmark to $60 per barrel, while setting prices at $65 for 2027 and $70 for 2028.
The committee said the recommendation reflects rising geopolitical tensions in Europe and the Middle East and ongoing volatility in global oil markets.
House of Reps Speaker Tajuddin Abbas warned that lowering the benchmark would have far-reaching effects on revenue projections, borrowing needs and the overall size of the budget. He questioned how the government intended to cover the potential revenue shortfall.
James Faleke, Chairman of the Joint Committees, defended the proposal, arguing that MTEF and FSP were planning documents that still required legislative approval before the executive could prepare an annual budget. He urged lawmakers to approve the framework to avoid disrupting the budget cycle.
Deputy Speaker Benjamin Kalu agreed with the Speaker's concerns, saying that while conservative oil benchmarks may be fiscally prudent, they would exacerbate the revenue gap unless clear funding strategies were outlined.
After a lengthy and inconclusive debate, the House adjourned consideration of the report and directed the committees to review the data and return with a revised presentation.
