The Centre for the Promotion of Private Enterprise (CPPE) has stated that the recently approved Medium-Term Expenditure Framework and Fiscal Strategy Paper (MTEF-FSP) for 2026-2028 indicates a move towards more realistic fiscal planning and greater budget credibility for Nigeria.
Key Fiscal Assumptions and Revenue Projections
This framework, approved by the Federal Executive Council (FEC) last week, sets out Nigeria's financial plan for the medium term. It establishes a conservative oil price benchmark of $64.85 per barrel and a budget exchange rate of N1,512 to one US dollar for the 2026 fiscal year.
The document outlines two potential oil production targets: an ambitious goal of 2.06 million barrels per day and a more cautious figure of 1.80 million barrels per day, which will be used for the actual budgeting process. For 2026, the projected economic growth rate is 4.68 per cent.
In terms of revenue, the gross federation income is estimated at N50.74 trillion for 2026. This sum is to be distributed with the Federal Government receiving N22.60 trillion, state governments getting N16.30 trillion, and local governments allocated N11.85 trillion. The total revenue expected by the Federal Government from all sources is approximately N34.33 trillion, which includes N4.98 trillion from government-owned enterprises.
Major expenditure items include statutory transfers of about N3 trillion, debt servicing costing N15.91 trillion, and non-debt recurrent expenses for personnel and pensions totalling roughly N15.27 trillion.
CPPE's Cautious Praise and Expert Warnings
In a policy brief, the CPPE, led by its Chief Executive Officer Dr. Muda Yusuf, commended the government for adopting more prudent revenue and spending assumptions. The Centre stated that this approach strengthens the foundation for improved budget credibility and more sustainable fiscal outcomes.
However, the CPPE also pointed out that the shift, while significant, does not go far enough, particularly regarding assumptions about crude oil prices and production levels. The brief highlighted that persistent revenue shortfalls, often caused by overly optimistic macroeconomic forecasts, remain a major weakness in Nigeria's budgeting. This repeatedly leads to large gaps between planned appropriations and actual implementation, which weakens fiscal discipline and erodes public trust.
The CPPE emphasised that for the budget to become a true governance tool rather than a yearly formality, both the executive and legislative branches must commit to realistic assumptions, transparent planning, disciplined spending, and efficient implementation.
The Critical Issue of Timely Submission
A significant point of contention is the late presentation of the MTEF-FSP to the National Assembly. The document is scheduled for presentation on 8 December 2025, barely three weeks before the new budget cycle begins on 1 January 2026.
This action directly contravenes the Fiscal Responsibility Act of 2007, specifically Section 11(1)(b), which mandates that the MTEF-FSP be submitted to the National Assembly at least four months before the start of the next financial year—a deadline that should have been met in August.
Analysts argue that this chronic delay is the root cause of late budget presentations, rushed legislative consideration, and poor implementation outcomes. They warn it has serious implications for businesses and state governments, which rely on the budget parameters to make critical economic decisions and funding plans.
Professor Godwin Oyedokun of Lead City University, Ibadan, explained that the normal legislative process for scrutinising the MTEF involves revenue hearings, engagements with Ministries, Departments and Agencies (MDAs), and reviews of fiscal assumptions over several weeks. With the current delay, lawmakers may have only days to perform this crucial duty if the tradition of a 1 January budget cycle is to be maintained.
He stated that compressing the fiscal timetable effectively ambushes the National Assembly, forcing legislators into a position where proper scrutiny is impossible without clashing with the executive's timeline. This rushed process turns the legislature into a mere "rubber stamp," damaging institutional checks and balances and accountability.
Professor Oyedokun further warned that a hurried review leads to weak validation of revenue projections, oil benchmarks, and borrowing plans. It also gives MDAs limited time to defend their budgets, often allowing inflated proposals to go undetected and reducing the capacity to block inefficient or duplicated spending.
Ultimately, he noted that investors, development partners, and credit rating agencies closely watch such procedural discipline. A rushed budget process signals institutional weakness and undermines confidence in the nation's fiscal governance.
The CPPE concluded its brief by urging strict future adherence to the Fiscal Responsibility Act, stating that timely submission is essential for informed legislative scrutiny, evidence-based debate, and the smooth preparation of the annual budget, which is vital for strengthening Nigeria's overall fiscal governance.
