THE POWER OF AFRICA

2026 BUDGET ADDRESS The President of the Federal Republic of Nigeria appeared before a Joint Session of the National Assembly to formally present the 2026 Appropriation Bill, in accordance with the provisions of the Constitution of the Federal Republic of Nigeria. This presentation marked a significant milestone in the administration’s reform agenda, coming after two and a half years of deep structural, fiscal, and macroeconomic reforms aimed at restoring economic stability, correcting longstanding distortions, and repositioning the Nigerian economy for sustainable and inclusive growth. The President acknowledged the difficult period Nigerians have endured as a result of necessary policy adjustments, including subsidy reforms, exchange rate realignment, and fiscal consolidation measures. He emphasized that while these reforms have imposed short-term costs on households and businesses, they were unavoidable and essential to prevent deeper economic instability and long-term decline. The administration reaffirmed its commitment to cushioning the impact of these reforms while ensuring that their long-term benefits are broadly shared. Theme and Strategic Direction of the 2026 Budget The 2026 Appropriation Bill is titled “Budget of Consolidation, Renewed Resilience and Shared Prosperity.” The theme reflects the government’s intention to consolidate recent macroeconomic gains, strengthen national resilience against internal and external shocks, and ensure that economic recovery translates into tangible improvements in living standards, employment opportunities, and poverty reduction across all regions of the Federation. The budget is designed as a bridge between stabilisation and growth, focusing on reinforcing fiscal discipline, improving competitiveness, enhancing productivity, and restoring investor confidence. Macroeconomic Performance and Outlook The President outlined encouraging signs of economic stabilisation and recovery: • Economic Growth: Nigeria’s Gross Domestic Product (GDP) grew by 3.98% in the third quarter of 2025, compared to 3.86% in the same period of 2024, reflecting improved performance in agriculture, services, trade, and parts of the industrial sector. • Inflation Trend: Inflation declined steadily for eight consecutive months, dropping from 24.23% in March 2025 to 14.45% in November 2025, driven by improved food supply, better monetary coordination, and reduced exchange rate volatility. • Oil and Gas Sector: Crude oil production increased following enhanced security in oil-producing areas, improved pipeline surveillance, and sector-wide reforms aimed at transparency and efficiency. • Non-Oil Revenue: Growth in non-oil revenue was achieved through improved tax administration, expansion of the tax base, digitisation of revenue collection, and reduction of leakages, rather than the imposition of excessive or punitive taxes. • External Reserves: Nigeria’s external reserves rose to approximately US$47 billion, the highest level in seven years, strengthening the country’s capacity to absorb external shocks and stabilise the exchange rate. These indicators, according to the President, demonstrate that the economy is on a path of gradual but sustained recovery. Review of the 2025 Budget Performance An assessment of the 2025 fiscal year revealed mixed outcomes: • Total Revenue: ₦18.6 trillion, representing approximately 61% of the annual target as at the third quarter of 2025. • Total Expenditure: ₦24.66 trillion, accounting for 60% of the approved budget. Capital expenditure implementation was constrained by the transition between fiscal cycles and the need to complete outstanding capital projects from the 2024 budget. In response, the President directed key fiscal authorities to strengthen budget execution, prioritise value for money, and ensure that capital releases in 2026 are timely, targeted, and impactful. Government-Owned Enterprises (GOEs) were issued firm directives to meet and exceed their revenue remittance obligations. This is to be enforced through full digitisation of revenue collection systems, automated reconciliation processes, real-time monitoring, and strict sanctions for non-compliance. Objectives of the 2026 Budget The 2026 Budget is guided by four overarching objectives: 1. Consolidation of Macroeconomic Stability Maintaining low inflation, stable exchange rates, and sustainable debt levels. 2. Improvement of the Business and Investment Climate Reducing regulatory bottlenecks, improving infrastructure, and promoting private-sector-led growth. 3. Promotion of Job-Creating Growth and Poverty Reduction Supporting sectors with high employment potential, particularly agriculture, manufacturing, MSMEs, and the digital economy. 4. Strengthening Human Capital and Social Protection Expanding access to education, healthcare, and targeted social safety nets for vulnerable populations. Fiscal Framework and Key Assumptions The 2026 fiscal framework is anchored on realistic assumptions and prudent projections: • Total Revenue: ₦34.33 trillion • Total Expenditure: ₦58.18 trillion • Capital Expenditure: ₦26.08 trillion • Fiscal Deficit: ₦23.85 trillion, representing 4.28% of GDP Key assumptions include: • Crude oil benchmark price of US$64.85 per barrel • Daily oil production of 1.84 million barrels • Exchange rate benchmark of ₦1,400 per US dollar The deficit will be financed through a mix of domestic and external borrowing, concessionary loans, and asset optimisation, within sustainable debt thresholds. Sectoral Priorities and Allocations Defence and Security A total of ₦5.41 trillion is allocated to defence and security, reflecting the government’s recognition that security is the foundation of development. Funding will support: • Modernisation of the Armed Forces • Intelligence-led policing • Border security and surveillance • Counterterrorism operations Armed non-state actors operating outside the authority of the state were formally designated as terrorists. Infrastructure Development An allocation of ₦3.56 trillion targets critical infrastructure, including roads, railways, power, and housing, to reduce the cost of doing business and improve national competitiveness. Education Education receives ₦3.52 trillion, with emphasis on access, quality, skills development, and tertiary education financing. Over 418,000 students have benefited from the Nigerian Education Loan Fund. Health Health sector allocation stands at ₦2.48 trillion, representing approximately 6% of the total budget, supplemented by more than US$500 million in international health grants. Agriculture and Food Security The budget prioritises mechanisation, irrigation, storage facilities, and agro-processing to improve productivity, reduce post-harvest losses, and enhance food security. Implementation, Governance, and Accountability The President reaffirmed the administration’s commitment to: • Stronger revenue mobilisation • Efficient and results-driven public spending • Transparency, accountability, and value-for-money audits Performance will be tracked through measurable outcomes rather than policy announcements, with periodic reporting to ensure legislative and public oversight. Conclusion The 2026 Budget of Consolidation, Renewed Resilience and Shared Prosperity represents a decisive step toward stabilising the economy, strengthening institutions, and ensuring that economic progress benefits all Nigerians. While acknowledging the transitional challenges ahead, the government reaffirmed its determination to protect the vulnerable, support productive sectors, and build a secure, competitive, and inclusive Nigeria. The President formally laid the 2026 Appropriation Bill before the National Assembly for consideration and approval.