MTEF clears path for 2026 budget as FG reviews revenue gaps

By : Terhemba Daka

Date: 4 December 2025 5:05am WAT

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Minister of Budget and National Planning, Atiku Bagudu. Photo Twitter

Minister of Budget and National Planning, Atiku Bagudu. Photo Twitter

The Federal Government has said the approval of the Medium-Term Expenditure Framework (MTEF) by the Federal Executive Council (FEC) provided a firmer basis to conclude work on the 2026 Appropriation Bill, even as it moves to manage capital rollovers and close the persistent gap between revenue and expenditure.

Responding to questions after the FEC meeting, the Minister of Budget and Economic Planning, Atiku Bagudu, said the next steps in the budget process would follow established institutional procedures.

According to him, President Bola Tinubu, “a strong believer in institutional order,” will transmit the budget to the National Assembly once it has been finalised and forwarded to him after the FEC’s consideration.

“The National Assembly determines when they are ready to receive the budget,” he said, noting that the approved MTEF, now headed for the legislature, offers clearer guidance for concluding the 2026 document.

Bagudu disclosed that a substantial portion of the 2025 capital expenditure is expected to be rolled over into 2026, acknowledging the multi-year nature of many projects.

He explained that once the National Assembly gives its approval, ministries will utilise the carried-over funds accordingly.

“Distinguishing what must be completed within one fiscal period and what naturally spills into another can be complex,” he said, adding that ongoing engagements between the executive and lawmakers are helping to ensure alignment.

On the persistent mismatch between revenue and expenditure, Bagudu said the challenge “is not unusual” for any budget, national or corporate.

He pointed to fluctuating interest rates and their impact on debt-service obligations as key pressures.

Despite revenue shortfalls, 16 per cent lower than last year’s projections, and the adoption of deliberately conservative oil assumptions, he said the government continued to meet debt obligations and sustain capital spending, especially on priority infrastructure under the Renewed Hope Agenda.

Providing context on the oil benchmark in the new fiscal framework, Bagudu said the 2026 projections were intentionally conservative.

While the 2025 budget was predicated on $75 per barrel and a production benchmark of 2.06 million barrels per day, the 2026 framework assumes $64.85 per barrel and production of 1.84 million barrels per day to minimise fiscal volatility.

Also speaking, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, noted that the 2024 capital budget, extended for nearly a year by the National Assembly, has been “largely fulfilled.”

He added that the 2025 capital releases were progressing, with warrants issued and ministries expected to conclude utilisation by December 30.

Edun said while the Ministry of Budget and Economic Planning will lead on the 2026 proposals, he remains available to support as necessary.

He highlighted the approval of a new $50 million Islamic Development Bank (IsDB)-financed agricultural development project for Bauchi State as part of FEC’s efforts to strengthen capital budgeting and restore the January-December budget cycle.

Both ministers stressed that the combination of a realistic MTEF, reinforced fiscal discipline, and closer Executive-Legislative coordination is intended to ensure a more stable and predictable budget environment in 2026.

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