2026 Appropriation Bill: Senate Defends Borrowing to Fund N25.91trn Deficit, Pushes Power Subsidy Exit

• Insists electricity subsidy must be fully removed

•Minister says N2.72bn capital allocation too meagre to drive trade, investment

Sunday Aborisade in Abuja

The Senate yesterday rose in strong defence of the federal government’s continued resort to borrowing, declaring that deficit financing remains inevitable to fund the proposed N58.47 trillion 2026 Appropriation Bill, which carries a deficit of about N25.91 trillion amid persistent revenue constraints and vast development needs.

This comes as the Minister of Industry, Trade and Investment, Mrs. Jumoke Oduwole, also yesterday, raised concerns over the proposed N2.72 billion capital allocation for the Ministry in 2026, warning that the amount was grossly inadequate to deliver the scale of programmes required to drive Nigeria’s industrialisation, trade expansion, and investment attraction agenda.

At a public hearing on the 2026 budget proposal held at the National Assembly, Chairman of the Senate Committee on Appropriations, Senator Solomon Adeola, said Nigeria could not realistically meet its infrastructure, security and social obligations without borrowing, insisting, however, that the era of wasteful, consumption-driven deficits must end.

Adeola stressed that the real issue was not borrowing itself, but how deficits are funded and how borrowed resources are utilised.

“Nigeria cannot help but continue borrowing because revenue inflows are unpredictable and development needs are enormous.

“What matters is how we borrow, how we fund deficits, and what the borrowed resources are used for,” he said.

He disclosed that while projected revenue for 2026 stands at N33.19 trillion, total expenditure was estimated at N58.47 trillion, leaving a deficit of N25.27 trillion, with debt service expected to consume about N15.90 trillion.

According to him, the figures underscore the urgency of revenue expansion, asset optimisation and stricter fiscal discipline.

The lawmaker said the federal government was deliberately avoiding excessive domestic borrowing that could crowd out private sector credit, opting instead for a mix of external financing, asset sales, privatisation, Public-Private Partnerships (PPPs), and concessioning of infrastructure.

Adeola also insisted that the electricity subsidy must be fully removed to free up scarce resources for development, warning that partial reforms in the power sector would continue to drain public finances.

“We must complete the unbundling and subsidy removal in the electricity sector. States are now empowered to generate power, but subsidy in that sector remains a major fiscal burden. It must be fully addressed,” he said.

He recalled that trillions of naira were previously spent on fuel subsidies funded largely through borrowing, describing President Bola Tinubu’s decision to remove fuel subsidy as a turning point that laid the foundation for ongoing fiscal reforms.

In a firm signal of legislative resolve, Adeola declared that the National Assembly would no longer approve extensions of budget implementation cycles, blaming repeated rollovers for poor budget outcomes.

“Never again will the National Assembly approve budget extensions. We must discipline our budgeting process, enforce timelines and ensure better coordination between policy design and implementation,” he said.

President of the Senate, Godswill Akpabio, represented by Deputy Senate President, Senator Barau Jibrin, framed the 2026 budget proposal as a moral and historical test for the nation, urging lawmakers and the executive to ensure that borrowing translates into tangible benefits for citizens.

“A budget is a moral document. It reveals our priorities and values. It is not enough to allocate funds; we must convert budgets into outcomes that Nigerians can see and feel,” Akpabio said.

Minister of State for Finance, Dr. Doris Nkiruka Uzoka-Anite, said the 2026 proposed budget was designed to align with government priorities, deepen reforms already underway and ensure that limited national resources are deployed with maximum efficiency and impact.

She acknowledged public frustration over rising living costs, describing Nigeria’s economic recovery as fragile but cautiously positive.

Fiscal policy expert, Dr. Olatilewa Adebajo, warned that Nigeria’s rising deficit could become unsustainable unless urgent steps are taken to strengthen revenue mobilisation and enforce fiscal rules.

He called for a comprehensive review and stricter implementation of the Fiscal Responsibility Act (FRA), describing it as a powerful but underutilised tool.

“We need to revisit the Fiscal Responsibility Act and enforce it strictly. Revenue leakages remain massive, especially in sectors like solid minerals, where Nigeria earns very little from enormous extraction activities,” Adebajo said, alleging that foreign interests continue to exploit the sector with minimal returns to the country.

On his part, the Accountant General of the Federation, Shamseldeen Olujimi, urged a fundamental shift from allocation-driven budgeting to impact-focused implementation.

“For too long, we have been strong on budget formulation but weak on budget translation. The real question is no longer how much we allocate, but what changes in the lives of Nigerians because of these allocations,” he said.

Olujimi stressed that success should be measured by functioning schools, operational health centres, reliable power supply and jobs created, rather than the size of budget figures or speed of passage.

Adeola assured that all funds, including service-wide votes and special interventions, would remain subject to National Assembly oversight, warning Ministries, Departments and Agencies (MDAs) that failure to defend their budgets would result in reallocations.

Also, the Minister of Industry, Trade and Investment, Mrs. Jumoke Oduwole, raised concerns over the proposed N2.72 billion capital allocation for her ministry, warning that the amount was grossly inadequate.

Speaking during the defence of the ministry’s 2026 budget proposal before the joint Senate Committees on Trade and Investment and Industry, Oduwole appealed to the National Assembly for a targeted increase in capital funding.

She stressed that without adequate resources, the ministry’s ability to support Tinubu’s Renewed Hope Agenda and the push for a trillion-dollar economy would be severely constrained.

According to her, the Ministry of Industry, Trade and Investment was central to diversifying the economy away from oil, growing non-oil exports, stimulating domestic production and attracting both local and foreign investment.

“The proposed capital allocation of N2.72 billion will be a stretch in meeting the full demands of our programmes and capital projects,” Oduwole told lawmakers.

She said, “Given the scope of our responsibilities, we respectfully seek the committee’s support for targeted enhancement of our capital allocation to enable us to effectively deliver on our mandate.”

Chairman of the Senate Committee on Trade and Investment, Senator Umar Sadiq, acknowledged the ministry’s strategic importance to the administration’s economic vision.

He noted that achieving a $1 trillion economy would be impossible without a strong performance from the industry, trade and investment sectors.

Sadiq said, “We are all aware of the renewal agenda of Mr. President, which is essentially to ensure that we have a trillion-dollar economy.

“The Ministry of Industry, Trade and Investment is a major partner in achieving this objective outside the oil sector.”

Also speaking, Chairman of the Senate Committee on Industry, Senator Francis Fadahunsi, urged the ministry to clearly demonstrate the impact of its agencies on the lives of Nigerians, particularly in terms of job creation, export growth and industrial development.

In her presentation, Oduwole outlined the ministry’s achievements over the past two years, arguing that the results recorded so far justified increased capital support.

She disclosed that Nigeria recorded about $21 billion in capital importation in the first 10 months of 2025, compared to $12 billion in 2024 and under $4 billion in 2023.

She attributed the improvement to deliberate ministry interventions, including the development of over $5 billion in bankable investment projects, sector-focused deal rooms and Nigeria’s first Domestic Investor Summit.

The minister said the ministry had also resolved more than 50 major investor bottlenecks and undertaken over 100 bilateral investment engagements with countries such as the United Kingdom, United States, United Arab Emirates, Brazil and Japan.