MTEF/FSP: Senate Backs Lower Oil Benchmark, Approves N54.46trn 2026 Spending Plan to Steady Economy

* Okays $60 crude benchmark for 2026; $65, $70 for 2027–2028

* Pegs oil output at 1.84mbpd in 2026

* Endorses N1,512/$ exchange rate projection

Sunday Aborisade in Abuja

The Senate on Tuesday approved far-reaching recommendations of its Committee on Finance on the 2026–2028 Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP), backing a lower crude oil benchmark and endorsing a N54.46 trillion federal spending plan for 2026 aimed at stabilising Nigeria’s economy amid global uncertainties.

The approval followed the presentation of the committee’s report by its Chairman, Senator Sani Musa, at plenary presided over by Senate President Godswill Akpabio.

The lawmakers said the adopted parameters were designed to promote macroeconomic stability, strengthen fiscal discipline and support the Federal Government’s ongoing economic reforms.

A key decision was the downward review of the crude oil benchmark price for 2026 from $64.85 per barrel to $60.

The Senate, however, approved benchmark prices of $65 and $70 per barrel for 2027 and 2028 respectively.

The committee explained that the conservative adjustment for 2026 was necessitated by heightened geopolitical tensions in Europe and the Middle East, as well as persistent volatility in the global oil market.

Despite the cautious oil price outlook, the Senate sustained crude oil production projections of 1.84 million barrels per day (mbpd) for 2026, 1.88mbpd for 2027 and 1.92mbpd for 2028.

It expressed optimism that improved security conditions, industry reforms and investments in the sector would boost output.

On exchange rate assumptions, the lawmakers endorsed projections of N1,512 to the dollar in 2026, N1,432.15 in 2027 and N1,383.18 in 2028.

The Senate noted that the figures were consistent with the Central Bank of Nigeria’s (CBN) policy direction and efforts to stabilise the naira through better coordination of fiscal and monetary policies.

The upper chamber also approved inflation projections of 16.5 per cent for 2026, 13 per cent for 2027 and nine per cent for 2028, citing anticipated tightening measures by monetary authorities.

Real Gross Domestic Product (GDP) growth projections of 4.68 per cent, 5.96 per cent and 7.9 per cent for the three years were equally sustained, with senators expressing confidence that recent tax and structural reforms would begin to yield measurable economic benefits from 2026.

In a bid to enhance revenues, the Senate urged strict implementation of newly enacted tax laws, describing them as critical to economic growth and development.

It also recommended the adoption of a National Scanning Policy within the National Single Window of the Nigeria Revenue Service, in collaboration with relevant agencies, to curb leakages, improve trade facilitation, boost transparency and enhance national security.

On fiscal aggregates, the Senate approved a total federal budget size of N54.46 trillion for 2026, comprising retained revenue of N34.33 trillion and new borrowings of N17.88 trillion from domestic and external sources.

Debt service was pegged at N15.52 trillion, while pensions, gratuities and retirees’ benefits were estimated at N1.376 trillion, with an overall fiscal deficit of N20.13 trillion.

Capital expenditure of N20.131 trillion, statutory transfers of N3.152 trillion, a sinking fund of N388.54 billion and recurrent (non-debt) spending of N15.265 trillion were also endorsed.

The committee expressed appreciation to the Senate for its support, voicing optimism that the approved framework would lay the foundation for sustainable economic growth and long-term prosperity.