In a significant move for Nigeria's economic planning, the Senate has formally approved the Central Bank of Nigeria's (CBN) foreign exchange rate projections for the year 2026. This approval is a key part of the 2026–2028 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP), which was submitted by President Bola Tinubu ahead of the 2026 budget presentation.
Senate Backs CBN's Naira Forecast for Coming Years
The upper legislative chamber confirmed the CBN's projection that the naira will average N1,512 per US dollar in 2026. Looking further ahead, the central bank anticipates the currency to strengthen to an average of N1,432.15 per dollar in 2027 and appreciate further to N1,383.18 per dollar in 2028.
According to the CBN, this optimistic outlook is grounded in expectations of a more efficient foreign exchange market, an appropriate monetary policy stance, and a boost in foreign exchange supply. The bank cited several contributing factors, including a sustained rebound in economic activities, growth in non-oil exports, stronger remittance inflows, and increased conversions from domiciliary accounts.
"Measures are in place to prevent speculative activity," the CBN stated, highlighting the enforcement of a foreign exchange code of conduct and a revised FX manual as part of efforts to stabilise the market.
Lawmakers Adopt Conservative $60 Oil Price for 2026
In a separate but critical adjustment, the Senate decided to take a more cautious stance on the country's oil revenue expectations. The lawmakers reduced the proposed crude oil price benchmark for 2026 to $60 per barrel, down from the $64.85 per barrel initially submitted by the executive arm of government.
This revision, as reported, reflects concerns over heightened geopolitical tensions in regions like Europe and the Middle East, alongside continued volatility in global oil markets. For the subsequent years, the Senate approved benchmarks of $65 per barrel for 2027 and $70 per barrel for 2028.
Despite the lower price assumption, the Senate retained optimistic production targets. It approved crude oil production volumes of 1.84 million barrels per day for 2026, 1.88 million barrels per day for 2027, and 1.92 million barrels per day for 2028. This decision is based on anticipated gains from ongoing reforms in the oil and gas sector and efforts to stabilise output.
Key Fiscal Projections in the 2026-2028 MTEF
The approved MTEF outlines a comprehensive fiscal roadmap for the federal government. Below are some of the critical projections:
- Total Federal Expenditure (2026): N54.46 trillion
- Inflation Projections: 16.5% (2026), 13% (2027), 9% (2028)
- Real GDP Growth: 4.68% (2026), 5.96% (2027), 7.9% (2028)
- Retained Revenue: N34.33 trillion
- New Borrowings: N17.88 trillion
- Fiscal Deficit: N20.13 trillion
- Debt Service: N15.52 trillion
Major allocations within the framework include N20.131 trillion for capital expenditure, N15.265 trillion for recurrent non-debt spending, and N1.376 trillion for pensions and retirees' benefits.
The framework's approval sets the stage for the detailed 2026 Appropriation Bill, which President Tinubu is expected to present to a joint session of the National Assembly. The decisions on exchange rates and oil prices will directly influence government revenue projections and spending plans for the next three years.
