CPPE Commends 2026-2028 MTEF Shift Toward Realistic, Credible Fiscal Planning

–        Tasks National Assembly to resist pressure to expand budget’s estimates

Dike Onwuamaeze

The Centre for the Promotion of Private Enterprise (CPPE) has commended the federal government for presenting the 2026–2028 Medium-Term Expenditure Framework (MTEF) whose highlights showed a welcome and deliberate shift toward more conservative, realistic, and credible fiscal planning.

The CPPE gave this commendation in its policy brief titled “2026–2028 Medium-term Expenditure Framework: A Shift Toward Fiscal Realism and Budget Credibility.”

The policy brief, which was signed by the Chief Executive Officer of CPPE, Dr. Muda Yusuf, also tasked the National Assembly to resist any pressure to inflate the expenditure estimates by expanding the budget without cogent need and reintroducing unrealistic macroeconomic assumptions.  

Yusuf said: “The 2026–2028 MTEF marks a positive step toward embedding fiscal realism, strengthening budget credibility, and aligning national expenditure with Nigeria’s real implementation capacity.

“For Nigeria’s budget process to evolve into a truly effective tool of governance rather than an annual procedural formality, both the executive and the legislature must uphold the principles of realistic and evidence-based assumptions, transparent and credible fiscal planning, discipline in public expenditure and improved implementation efficiency.

“If sustained, these reforms will help entrench macroeconomic stability, rebuild public confidence and enhance the credibility of the budget process.”

He said that the recently presented highlights of the 2026–2028 MTEF by the Minister of Budget and National Planning, Senator Abubakar Atiku Bagudu, responded to heightened global uncertainties, Nigeria’s domestic fiscal pressures, recurring missed revenue targets, the pre-election dynamics that are expected in 2026, and the longstanding challenges around oil production and oil-price volatility.

“By adopting more cautious revenue and expenditure assumptions, the new MTEF strengthens the foundation for improved budget credibility and more sustainable fiscal outcomes,” Yusuf said.

He attributed the persistent revenue underperformance to overly optimistic macroeconomic assumptions and identified it as one of the most significant weaknesses of Nigeria’s budget process.

Yusuf said that “this has repeatedly resulted in wide gaps between appropriations and actual implementation, weakening fiscal outcomes and undermining public trust.”

He ascribed the implementation shortfalls and widening credibility gaps of the 2025 budget to unrealistic assumptions. 

Therefore, “the emerging shift toward more realistic assumptions in the 2026–2028 MTEF is commendable and represents an important step toward reducing variances between projected and realised outcomes and toward restoring the budget as a credible governance tool rather than a routine, ceremonial annual document,” Yusuf said.

He, however, noted that the shift, though significant, did not go far enough, particularly regarding crude oil price and output assumptions.  

According to him, one major improvement in the new MTEF is the introduction of dual oil production parameters, namely the technical production target of 2.06 mbpd and benchmark (budget) production of 1.80 mbpd

“Using 1.80 mbpd as the revenue basis is significantly more prudent than the 2.06 mbpd used in the 2025 budget, especially given chronic underproduction, vandalism, theft, and operational bottlenecks.

“However, based on historical production trends, the CPPE proposes an even more conservative benchmark of 1.6 mbpd to ensure fiscal resilience,” he said.

Yusuf said that the 2026 oil price benchmark of $64.85 per barrel, down from $75 in the 2025 budget, is still optimistic even though it reflected a more cautious approach.  

This is in view of the      USA’s Energy Information Administration’s projection of $55/barrel; Goldman Sachs’ $56/barrel and the World Bank’s $60/barrel that were driven by expectations of increased global supply, moderating demand, and rising inventories.

“Aligning Nigeria’s benchmark closer to $60/barrel would strengthen the MTEF’s resilience,” he said.  

The CPPE also expressed concern about Nigeria’s debt sustainability as the MTEF projected and allocated ₦15.91 trillion to debt service in 2026, representing 46% of projected revenue.

It also remarked that the delayed presentation of the MTEF was not aligned to the provisions of the Fiscal Responsibility Act that mandated that the MTEF should be submitted to the National Assembly at least four months before the start of the next fiscal year.  

It recommended that going forward, strict adherence to the provisions of the Act is imperative for strengthening fiscal governance.