The Federal Government has taken a decisive step towards the 2026 fiscal year with the approval of a crucial planning document, aiming to bring more stability to the nation's finances.
MTEF Approval Sets Stage for 2026 Appropriation Bill
The Federal Executive Council (FEC) has given its nod to the Medium-Term Expenditure Framework (MTEF), a move that provides a solid foundation for finalising the 2026 Appropriation Bill. The Minister of Budget and Economic Planning, Atiku Bagudu, announced this after the FEC meeting held on 4 December 2025.
Bagudu explained that the approved framework, now headed to the National Assembly, offers clearer guidance for concluding next year's budget. He emphasised President Bola Tinubu's commitment to institutional order, stating the President will transmit the budget to the legislature once it is finalised and forwarded to him. "The National Assembly determines when they are ready to receive the budget," Bagudu noted.
Managing Capital Rollovers and Fiscal Pressures
A significant revelation from the minister is that a substantial part of the 2025 capital expenditure is expected to be rolled over into 2026. This acknowledges the multi-year nature of many government projects. Bagudu stated that once the National Assembly approves, ministries will utilise these carried-over funds.
On the persistent gap between government earnings and spending, Bagudu said the challenge is "not unusual" for any budget. He identified fluctuating interest rates and their impact on debt-service obligations as key pressures. Despite revenue being 16 per cent lower than last year's projections, the government has continued to meet debt obligations and sustain capital spending, particularly on priority infrastructure under the Renewed Hope Agenda.
The government has adopted deliberately conservative oil benchmarks to minimise fiscal volatility. While the 2025 budget was based on $75 per barrel and 2.06 million barrels per day, the 2026 framework assumes $64.85 per barrel and production of 1.84 million barrels per day.
Progress on Current Budgets and Future Coordination
Also speaking, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, provided updates on current capital budgets. He noted that the 2024 capital budget, extended by the National Assembly, has been "largely fulfilled." For the 2025 capital releases, warrants have been issued and ministries are expected to conclude utilisation by 30 December.
Edun highlighted the FEC's approval of a new $50 million Islamic Development Bank (IsDB)-financed agricultural development project for Bauchi State. This is part of efforts to strengthen capital budgeting and restore the desired January-December budget cycle.
Both ministers stressed that the combination of a realistic MTEF, reinforced fiscal discipline, and closer coordination between the Executive and the Legislature is intended to ensure a more stable and predictable budget environment in 2026.
