PRESIDENT Bola Tinubu, on Friday, presented the 2026 budget totalling N58.47 trillion to the National Assembly. President Tinubu’s revenue estimates stood at N34.33 trillion, leaving a fiscal deficit of N23.85 trillion.
Debt servicing was alloted N15.52 trillion, with crude oil price estimated at $64.85 per barrel. Daily oil production was pegged at 1.84 million barrels, with the exchange rate pegged at N1,400 to the dollar.
Security topped the spending plan, with N5.41 trillion allocated to defence and national security, followed by infrastructure which received N3.56 trillion alllocation. A budget of N3.52 trillion allocation was allocated to education, with health getting N2.48 trillion.
Tagged ‘Budget of Consolidation, Renewed Resilience and Shared Prosperity,’ the budget estimated recurrent (non‑debt) expenditure at N15.25 trillion and capital expenditure at N26.08 trillion.
Strengths
The budget has its own strengths. First, capital expenditure is 45 percent of the entire budget, which is encouraging and significant. This means, ceteris paribus, there will be several projects that will be carried out in 2026. With the Nigerian government deferring 70 percent of the 2025 capital projects to 2026, analysts say the coming year will be a festival of projects across Nigeria, ranging from bridges to roads and rails.
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“And we can never underestimate the importance of infrastructure to economic growth. You can’t talk about any developed country today without strong infrastructure,” said an development economist, Mr Anene Ajakaiye. “With good infrastructure comes better food supply from rural to urban areas. Access to market is easier and financial inclusion is higher.”
Also, the projection of N1400/$ is realistic. For the better part of 2025, the naira has been stable, hovering between 1,400/$ and 1,500/$. The naira exchanged at 1,464/$ on Friday in the Central Bank of Nigeria (CBN)’s NFEM market as against 1,457/$ the previous rate. With the CBN’s ongoing foreign exchange (FX) reforms and the reduction in petrol imports due to Dangote Petroleum Refinery projected production increases, the naira may hang around the 1,400/$ rate, even though some analysts say the projection is a bit ambitious.
Chief Executive Officer of Financial Derivatives Company, Mr Bismark Rewane, predicts that the exchange rate will stay around 1,450/$ and 1,500/$.
Potential risks: Oil price, debt servicing, revenue
There are, however, potential risks with some of the assumptions. Crude oil price is pegged at $64.85 per barrel, with daily output estimated at 1.84 million barrels per day. But Goldman Sachs said on Thursday that Brent and WTI crude oil would decline further to 2026 averages of $56 per barrel and $52 per barrel, respectively.
“Barring large supply disruptions or OPEC production cuts, lower oil prices in 2026 will likely be required to rebalance the market after 2026,” the bank said on December 18. “We see net downside risks to our 2026-2027 oil price outlook.”
The assumption of oil output of 1.84 million barrels per day is also ambitious. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) data show that a total of 454.28 million barrels of crude oil and condensate were produced between January and September 2025. This translates to an average daily production of 1.66 mbpd, which was below the budget assumption of 1.84 mbpd. With oil theft seen continuing and production challenges persisting due to poor investments and old infrastructure, the oil output estimate is seen to be ambitious, said an oil and gas analyst, Mr Charles Awurum.
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Also, the allocation of N15.52 trillion, which is 27 percent of the entire budget, to debt servicing is an indictment on the government. In the last 10 years, the Nigerian government has raised its borowing. President Bola Tinubu has particularly binged on external loans, which exposes Nigeria to foreign exchange risks.
President Tinubu government’s loans constitute 43 percent of Nigeria’s total public debt, which stood at N152.398 trillion as of June 2025.
As of the time former President Mujammadu Buhari left office on May 29, 2023, the nation’s total public debt stood at N87.379 trillion, according to the Debt Management Office (DMO)’s June 2023 data. However, with President Tinubu coming to power that same day, Nigeria’s debt profile rose thereafter, hitting N152.398 trillion as of June 2025, the DMO data reveal.
Also, there is no proof that Nigeria will realise its targeted N34.33 trillion revenue for 2026. In 2025, the nation projected N40.8 trillion revenue but ended up earning merely N10.7 trillion, with a deficit of nearly N30 trillion. Though the Nigerian government is hoping to generate huge revenue from taxes, there still could be compliance and corruption challenges. And, also, placard-carrying protests could spread, especially if harship persists.
According to SBM Intelligence, “Protests are expected to coalesce as new tax laws take effect, and their effects
become clearer,” meaning that there may be a difference between expectations and actualities.
