MTEF 2026-2028 signals shift toward fiscal realism, budget credibility — CPPE

By : Joesph Chibueze

Date: 7 December 2025 12:56pm WAT

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CPPE Director, Dr. Muda Yusuf

CPPE Director, Dr. Muda Yusuf

The Centre for the Promotion of Private Enterprise (CPPE) has described the Medium-Term Expenditure Framework/Fiscal Strategy Paper (MTEF/FSP) approved last week by the Federal Executive Council (FEC) as a shift toward fiscal realism and budget credibility.

This is even as there is palpable fear that the 2026 budget may run into troubled waters, as the Federal Government plans to present the MTEF-FSP to the National Assembly today, 8 December 2025, barely three weeks before the beginning of a new budget cycle—an action that should have been taken in August.

Section 11(1)(b) of the Fiscal Responsibility Act 2007 mandates the Federal Government to lay before the National Assembly an MTEF-FSP for the next three financial years not later than four months before the commencement of the next financial year.

MTEF-FSP is a government’s plan that outlines how it will spend money over the medium term (e.g., 3–5 years) while keeping fiscal strategies in check.

Under the Fiscal Responsibility Act, the document must be approved by the National Assembly before the President can present the next year’s budget.

The MTEF-FSP approved by the Federal Executive Council last week fixes a conservative oil price benchmark of $64.85 per barrel and a budget exchange rate of N1,512/$1 for 2026.

It also proposes two oil production targets, split between an ambitious 2.06 million barrels per day and a lower 1.80 mbpd used for budgeting.

The 2026 macro assumptions also include a growth rate projection of 4.68 per cent. Gross Federation revenue is estimated at N50.74 trillion for 2026, to be shared as follows: Federal Government, N22.60 trillion; states, N16.30 trillion; and local governments, N11.85 trillion. Total Federal Government revenue from all sources is projected at about N34.33 trillion, inclusive of N4.98 trillion remitted by government-owned enterprises.

The major spending heads include statutory transfers of around N3 trillion; debt service of N15.91 trillion; and non-debt recurrent (personnel and pensions) of about N15.27 trillion.

The CPPE, in a policy brief made available to The Guardian over the weekend, said that by adopting more cautious revenue and expenditure assumptions, the new MTEF strengthens the foundation for improved budget credibility and more sustainable fiscal outcomes.

The document, signed by the Chief Executive Officer of CPPE, Dr. Muda Yusuf, however, noted that though the shift is significant, it does not go far enough, particularly regarding crude oil price and output assumptions.

It said that persistent revenue underperformance, rooted in overly optimistic macroeconomic assumptions, remains one of the most significant weaknesses of Nigeria’s budgeting process. This, it says, has repeatedly resulted in wide gaps between appropriations and actual implementation, weakening fiscal discipline and undermining public trust.

As a way out, CPPE said, “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.”

The Centre, however, frowned at the late presentation of the MTEF-FSP to the National Assembly, saying, “The Fiscal Responsibility Act mandates that the MTEF be submitted to the National Assembly at least four months before the start of the next fiscal year. The delayed presentation of the 2026–2028 MTEF is therefore not in alignment with the Act.”

It noted that timely submission is crucial to enabling informed legislative scrutiny, evidence-based debate, and smooth preparation of the annual budget. “Going forward, strict adherence to the provisions of the Act is essential for strengthening fiscal governance,” it noted.

Analysts say this late submission of MTEF has been the reason for late presentation of the budget, a hurried consideration by the National Assembly, and poor implementation.

They say the delay has grave implications for businesses as well as state governments, who are waiting on budget parameters to make informed economic decisions and funding estimates.

Professor Godwin Oyedokun of Lead City University, Ibadan, said ordinarily, committees hold revenue hearings, engage MDAs, review fiscal assumptions, and make adjustments over several weeks. “With December already here, lawmakers effectively have days, not weeks, to scrutinise the MTEF if the government still wants to meet the 1 January budget-cycle tradition,” he said.

He noted that the normal process—budget defence by MDAs, committee harmonisation, report adoption—usually requires four to six weeks. “With this delay, lawmakers may have less than two weeks to finish the entire exercise if the government insists on signing the 2026 budget into law by 1 January,” Prof. Oyedokun said, adding that many observers will see it as an ambush of the National Assembly because compressing the fiscal timetable places legislators in a position where they cannot carry out proper scrutiny without clashing with the executive’s timeline. Any attempt to insist on deeper review risks political backlash or public perception that they are “stalling” the budget.

“This creates the impression of pressure tactics, making the approval process look rushed and one-sided, with grave consequences including weak revenue validation, because a rushed MTEF review means key revenue projections, oil benchmarks, tax assumptions, and borrowing plans may not be properly interrogated. That increases the risk of unrealistic expectations and mid-year budget failures.

“MDAs also get limited time to defend their budgets. That often leads to inflated proposals escaping detection, inadequate alignment of spending with national priorities, and reduced capacity to block inefficiencies or duplication.”

He said oversight is strongest when committees have time to question, compare, analyse, and negotiate, noting that compressing timelines reduces parliament to a “rubber stamp,” damaging institutional balance and accountability.

“Investors, development partners, and credit rating bodies watch procedural discipline closely. A rushed budget signals institutional weaknesses and undermines confidence in the country’s fiscal governance,” he said.

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