The Lagos Chamber of Commerce and Industry (LCCI) has sounded a strong alarm over the Federal Government's plan to spend a massive N15.52 trillion on debt servicing in the proposed 2026 budget. The Chamber's Director-General, Dr. Chinyere Almona, raised these concerns, labelling the allocation a significant and growing fiscal burden that poses a direct threat to Nigeria's economic stability.
Optimistic Budget Assumptions Carry Significant Risks
While acknowledging the budget's early presentation and its strategic shift from stabilisation to growth acceleration, Almona pointed out that several underlying assumptions are overly optimistic. She highlighted the oil price benchmark of $64.85 per barrel as a potential risk, noting it is higher than current prices around $60. With oil expected to contribute 35.6% of total revenue, any dip in prices could worsen fiscal pressures.
Furthermore, the oil production target of 1.84 million barrels per day was described as ambitious against the current output of roughly 1.49 million barrels. Almona cautioned that without tackling oil theft and improving infrastructure, this target may be missed.
The Chamber also questioned the foreign exchange rate assumption of N1,512 to the dollar, which implies a controlled depreciation. While this could boost Naira revenue, it would also make imports, debt servicing, and inflation control more expensive. The inflation target of 16.5% for 2026 was also seen as challenging for a pre-election year, where spending typically fuels price rises.
Implementation Capacity and Overlapping Budgets a Major Hurdle
Beyond the numbers, Almona expressed deep worry about Nigeria's historically weak budget implementation. This challenge could be magnified in 2026 by the simultaneous operation of multiple budget cycles, including the 2024 budget, supplementary appropriations, and both the 2025 and 2026 budgets.
"This overlap poses serious risks to fiscal coordination, transparency, and the actual execution of projects," she warned. The success of the budget, she insisted, will depend less on the size of allocations and more on execution discipline, capital efficiency, and sustained support for productive sectors.
Pathway to Growth Requires Decisive Action
Looking forward, Almona identified agriculture, manufacturing, infrastructure, and energy as key growth drivers for 2026. To unlock this potential, she emphasised an urgent need for:
- Stricter borrowing discipline to curb the debt burden.
- Stronger revenue mobilisation efforts.
- Deeper public-private partnerships to fund critical investments.
She also listed critical issues Nigeria must monitor on its path to a $1 trillion economy by 2030, including new tax laws, insecurity affecting food systems, and policy inconsistencies. Resolving the "naira-for-crude" policy and boosting supply to local refineries were highlighted as essential steps to conserve foreign exchange.
In conclusion, while the 2026 budget presents an opportunity for economic expansion, the LCCI's analysis underscores that its promise is heavily contingent on prudent management, realistic assumptions, and robust implementation to avoid exacerbating the nation's fiscal strains.
