Nigeria 2026 Budget: Ambition Meets Reality

By Ugo Inyama

Nigeria’s 2026 budget arrives like a household plan announced at a family meeting. The head of the household speaks confidently, outlining how bills will be paid, repairs completed, and children supported through the coming year. The figures are large, the intentions reassuring, and the tone suggests control. At ₦58.18 trillion, the budget is expansive and deliberate, signalling that the family has weathered a difficult period and is ready to move forward. Presented in December 2025 by President Bola Ahmed Tinubu to a joint session of the National Assembly, it is framed as a “Budget of Consolidation, Renewed Resilience and Shared Prosperity.”

Yet in any household, plans are not judged by how confidently they are announced, but by whether income is steady, debts are manageable, and promises are realistic. That is the quieter test confronting Nigeria’s 2026 budget once the applause fades.

Large Numbers and Heavy Fixed Obligations

At ₦58.18 trillion, the proposed budget is among the largest in Nigeria’s history. Projected revenues of ₦34.33 trillion against expenditure of ₦58.18 trillion imply a deficit of ₦23.85 trillion, around 4.28 per cent of GDP. On the surface, this does not suggest fiscal recklessness. Many households run temporary deficits to invest in the future.

The pressure, however, lies in fixed obligations. Over ₦15 trillion is allocated to debt servicing. These are bills that must be paid before anything else is considered. No matter how ambitious the plan, these obligations come first. As fixed costs rise, flexibility shrinks, and any shortfall in income becomes immediately stressful.

This does not mean the household is insolvent. It does mean that discretionary space is narrowing, and execution errors or revenue shocks will be felt quickly.

Revenue Assumptions: Counting Income Before It Arrives

The success of the budget rests heavily on revenue assumptions. Oil remains central, with benchmarks of about US$64.85 per barrel and production targets of 1.84 million barrels per day. These assumptions are not implausible, but Nigeria’s recent experience urges caution. Theft, vandalism, underinvestment, and regulatory uncertainty have repeatedly undermined oil earnings.

Planning major expenditure on the expectation that income will improve before structural problems are resolved is like budgeting on overtime pay that has not yet been confirmed. It may happen, but reliance on it introduces risk.

Non-oil revenue projections are even more ambitious. Nigeria’s tax-to-GDP ratio remains low, reflecting informality, weak compliance, and limited administrative reach. Improving this ratio is essential, but it is rarely quick. Trust, enforcement, and systems take time to mature. When projections outpace institutional capacity, borrowing becomes the default adjustment mechanism.

Debt Sustainability: The Real Constraint

Debt sustainability is acknowledged in the budget, but the more meaningful question is not debt-to-GDP ratios, but how much of national income is absorbed by repayments. In a low-revenue economy, servicing costs matter more than headline debt stock.

With over ₦15 trillion devoted to debt servicing, a significant share of income is already spoken for. This limits the ability to respond to shocks, invest aggressively in development, or expand social support without further borrowing.

The concern is not debt itself, but outcomes. Persistent infrastructure gaps, limited industrial expansion, and human capital constraints suggest that past borrowing has delivered uneven returns. When debt does not raise earning capacity, it becomes a burden rather than a bridge to growth.

Security Spending: High Cost, Limited Relief

Security and defence receive over ₦5.4 trillion, reflecting Nigeria’s severe security challenges. Insecurity disrupts farming, schooling, trade, and daily life, imposing costs far beyond the budget line.

The issue is not the priority accorded to security, but effectiveness. Despite rising allocations over several years, insecurity remains widespread. It is akin to paying ever-higher security fees while still feeling unsafe at home. The challenge appears less about effort and more about coordination, accountability, and outcomes.

Without improvements in justice delivery, inter-agency cooperation, and local economic stability, security spending risks becoming a permanent expense rather than an investment that reduces future costs.

Infrastructure: Roads Under Perpetual Repairs

The budget places strong emphasis on capital expenditure, with over ₦26 trillion allocated. Infrastructure remains central to Nigeria’s growth ambitions. Roads, power, and transport systems are essential to productivity.

Yet Nigeria’s experience has often been that of a house under constant repair. Funds are allocated, work begins, but completion drags. Costs rise, timelines slip, and the same problems reappear in subsequent budgets. Power shortages and logistics bottlenecks persist despite repeated spending.

The 2026 budget raises allocations but offers limited clarity on how delivery will improve. Without stronger project prioritisation, oversight, and completion discipline, higher spending risks reproducing familiar cycles of partial repair rather than delivering durable gains.

Human Capital: Underfunded, Gradualism Amid Urgency

Education and health receive ₦3.52 trillion and ₦2.48 trillion respectively. These allocations represent continuity rather than a decisive shift. Given Nigeria’s youthful population, this cautious approach carries long-term consequences.

Human capital investment is akin to investing in children’s education and health. It may not yield immediate returns, but it determines future productivity and stability. Countries that have successfully transformed their economies treated education and health as foundational, not residual.

While the 2026 budget recognises their importance rhetorically, the scale of investment suggests gradualism where demographic pressure demands urgency.

Revenue, Trust, and Compliance

Revenue mobilisation ultimately depends on trust. Citizens are more willing to contribute when they believe resources are used wisely and fairly. Persistent service delivery failures and perceptions of waste by public institutions undermine this trust.

In such an environment, revenue reforms may appear sound on paper but struggle in practice. Without visible improvements in how funds are deployed, compliance weakens and revenue projections become harder to realise.

Legislative Oversight and Follow-Through

The pace of legislative consideration has raised questions about scrutiny. Speed can be useful, but enforcement matters more. Nigeria’s budgetary weakness has historically been less about planning and more about follow-through.

When rules are not enforced and consequences are unclear, discipline erodes. Strengthening accountability across the entire budget cycle is therefore as important as the figures themselves. This is where the National Assembly’s responsibility is most critical.

Areas for Improvement: Ambition to Execution

For the 2026 budget to translate ambition into impact, several improvements are essential. Revenue targets must be sequenced with reforms, not assumed ahead of them. Oil-sector assumptions require visible progress on theft reduction and investment stability, while non-oil revenue should focus on broadening the base rather than overburdening a narrow segment.

Execution discipline must improve through fewer but fully funded projects, enforceable timelines, and transparent reporting. Security spending requires sharper accountability and better integration with justice and local economic strategies. Human capital financing must better reflect demographic realities. Above all, accountability must extend beyond budget approval through monitoring, public reporting, and consequences for non-performance.

Conclusion

Nigeria’s 2026 budget reflects ambition and a clear desire to project stability after a difficult period. Its weaknesses lie not in intent, but in revenue uncertainty, rising debt obligations, execution capacity, and institutional depth.

Like any household plan, it will be judged not by presentation, but by outcomes. If revenue assumptions fail or execution falters, ambition will give way to strain. But if institutions hold, discipline improves, and accountability is enforced beyond approval day, the same plan could begin to rebuild confidence.

The true test of the 2026 budget is not whether it sounds reassuring, but whether it restores trust between plans and outcomes. Until Nigeria consistently closes that gap, each new budget will continue to feel less like a roadmap to shared prosperity and more like a hopeful conversation deferred to next year.

*Ugo Inyama writes from the African Digital Governance Centre, Manchester, UK
e: Ugo@africandgc.org
w: www.africandgc.org