2026: Debt servicing to gulp 27% of N58.18trn budget
President Bola Ahmed Tinubu yesterday presented the N58.18 trillion 2026 Appropriation Bill to the National Assembly, with debt servicing projected to gulp N15.52 trillion.
The N15.52 trillion earmarked for debt servicing represents about 26.7 per cent of the total expenditure, exceeding allocations to several key sectors and remaining one of the largest single spending items in the budget.
Presenting the budget christened: “Budget of Consolidation, Renewed Resilience and Shared Prosperity” at a joint session of the Senate and House of Representatives, Tinubu said the proposed spending framework reflects the administration’s determination to consolidate macroeconomic reforms while managing debt with discipline.
He disclosed that total projected expenditure for 2026 stands at N58.18 trillion, against expected revenue of N34.33 trillion, leaving a deficit of N23.85 trillion, equivalent to 4.28 per cent of Gross Domestic Product (GDP).
Other major components of the budget include N15.25 trillion for recurrent (non-debt) expenditure and N26.08 trillion for capital spending, reflecting the government’s stated emphasis on infrastructure, human capital and productivity.
Tinubu acknowledged the fiscal pressure imposed by debt obligations but said the administration remains committed to fiscal sustainability, transparency and value-for-money spending.
Despite the rising cost of servicing debt, Tinubu argued that recent reforms are beginning to yield results, citing 3.98 per cent GDP growth in Q3 2025, moderation in inflation to 14.45 per cent in November 2025, improved oil output and an increase in external reserves to about $47 billion, a seven-year high.
However, analysts note that the size of the debt service allocation continues to limit fiscal space, even as the government increases spending on capital projects and social sectors.
The rising cost of debt servicing is occasioned by increased borrowings to fund budget deficits.
Security gets lion’s share, voted N19.91trn in 6yrs
Under the budget proposal, security received the lion’s share of N5.41 trillion, underscoring emphasis on addressing security challenges in the country.
Weekend Trust reports that if approved, defence and security would have cumulatively gulped N19.91 trillion in the last six.
A sectoral breakdown of the proposal showed that infrastructure followed security with an allocation of N3.56 trillion, while education received N3.52 trillion and health was allocated N2.48 trillion.
Besides the N5.41 trillion 2026 allocation for defence sector, records indicate that over N14.5 trillion has been allocated to the security sector in the past five years as part of sustained efforts to strengthen national security.
Since 2021, budgetary provisions for defence, the police and other security agencies have risen steadily. In 2023, defence and security received N2.74 trillion, representing 13 per cent of total expenditure.
The allocation stood at N2.41 trillion in 2022, while the 2021 budget provided N840.56 billion, alongside N121 billion for capital projects. In 2024, security again took the largest share with N3.25 trillion, about 12 per cent of the total budget.
Despite the rising allocations, the country continues to grapple with terrorism, insurgency, banditry and kidnapping, prompting concerns among stakeholders about the effectiveness of the huge spending in delivering tangible security outcomes.
The presentation of the 2026 budget followed the passage of the 2026–2028 Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) by the National Assembly earlier this week.
Although lawmakers initially approved a budget estimate of N54.5 trillion, the Federal Executive Council later approved an upward review to N58.18 trillion. The approval was granted at an emergency meeting of the Federal Executive Council chaired by Vice President Shettima.
Briefing newsmen afterwards, the Director-General of the Budget Office, Tanimu Yakubu, said the 2026 budget was six per cent higher than the 2025 estimate.
In his address to lawmakers, President Tinubu said the 2026 budget was designed to consolidate ongoing reforms, stabilise the economy and translate recovery into improved living standards for Nigerians.
He noted signs of economic stabilisation, including improved growth, moderating inflation, rising oil production and stronger external reserves.
According to the president, the budget prioritises security, human capital development and infrastructure as interlinked pillars for national renewal, stressing that without security, investment cannot thrive, and without educated and healthy citizens, productivity will remain weak.
Key aggregates
According to President Tinubu, expected total revenue is N34.33 trillion, projected total expenditure N58.18 trillion, including N15.52 trillion for debt servicing and recurrent (non‑debt) expenditure: N15.25 trillion.
Others are capital expenditure, N26.08 trillion, budget deficit and N23.85 trillion, representing 4.28% of GDP.
“These numbers are not just accounting lines. They are a statement of national priorities. We remain firmly committed to fiscal sustainability, debt transparency, and value‑for‑money spending.
“The 2026–2028 Medium‑Term Expenditure Framework and Fiscal Strategy Paper sets the parameters for this Budget. Our projections are based on a conservative crude oil benchmark of US$64.85 per barrel; crude oil production of 1.84 million barrels per day; and an exchange rate of N1,400 to the US Dollar for the 2026 fiscal year,” Tinubu said.
‘How we’ll implement the 2026 budget’
President Tinubu said the 2026 budget will be marked by stricter discipline in budget implementation, with a strong focus on accountability, efficiency and timely execution.
According to him, clear directives have been issued to the Minister of Finance and Coordinating Minister of the Economy, the Minister of Budget and Economic Planning, the Accountant-General of the Federation and the Director-General of the Budget Office to ensure that the 2026 budget is implemented strictly in line with approved provisions and timelines.
The President expressed optimism that revenue performance would improve significantly, driven by the new National Tax Acts and ongoing reforms in the oil and gas sector.
He noted that the reforms are aimed not only at increasing revenue, but also at promoting transparency, efficiency, fairness and long-term value within the nation’s fiscal framework.
Tinubu also issued a firm warning to Government-Owned Enterprises (GOEs), directing their heads to meet assigned revenue targets. To achieve this, he said the government would deploy end-to-end digitisation of revenue mobilisation, including standardised electronic collections, interoperable payment systems, automated reconciliation, data-driven risk profiling and real-time performance dashboards.
He stressed that these measures would help eliminate leakages, ensure verifiable compliance and guarantee prompt remittances. The President added that revenue targets would form key components of performance evaluations and institutional scorecards, warning that Nigeria can no longer tolerate inefficiencies, leakages or underperformance in strategic agencies.
Tinubu said his administrations reform efforts were already yielding measurable results.
“Our economy grew by 3.98% in Q3 2025, higher than the 3.86% recorded in Q3 2024. Inflation has moderated for eight consecutive months, with headline inflation declining to 14.45% in November 2025, from 24.23% in March 2025. With stabilising food and energy prices, tighter monetary conditions, and improving supply responses, we expect the disinflationary trend to persist—so that inflation continues to decline further over the 2026 horizon, barring major supply shocks.
“Oil production has improved, supported by enhanced security, technology deployment, and sector reforms. Non‑oil revenues have expanded significantly through better tax administration —not excessive taxation.
“Investor confidence is returning, reflected in capital inflows, renewed project financing, and stronger private‑sector participation. Our external reserves rose to a 7‑year high of about US$47 billion as at 14 November 2025, providing more than 10 months of import cover and a stronger buffer against shocks,” he said.
Multiple budget implementations to end in March — Tinubu
President Tinubu also announced that the era of multiple budget implementations in Nigeria will come to an end by March 2026, stating that from April, the country will operate a single budget anchored on a unified revenue cycle.
According to the President, the reform is aimed at addressing long-standing challenges such as abandoned projects, unpaid contractual obligations and overlapping budgets inherited across different administrations.
“This is research, a very hard one. Avoiding abandoned projects, unpaid contractual obligations and running multiple budgets, both inherited and of fulfilled mandates, is a problem staring the nation.
“So we are terminating the habit of running through a budget on one inflow. By March 31, 2026, all capital liabilities from previous years will be fully funded and closed. No overlaps, no excuses and no rollover cultures,” he said.
President seeks repeal, extension of 2025 budget to March 2026
Meanwhile, President Tinubu has asked the National Assembly to repeal and re-enact the 2024 and 2025 Appropriation Acts, while also seeking an extension of the 2025 budget implementation to March 31, 2026.
The request was contained in a letter dated December 18, 2025, addressed to the Speaker of the House of Representatives, Abbas Tajudeen, and read on the floor of the House on Friday.
In the letter, President Tinubu transmitted the Appropriation (Repeal and Re-Enactment) Bills, 2024 and 2025, for legislative consideration in line with constitutional and appropriation procedures.
According to the President, the 2024 Appropriation Act of N35.06 trillion is to be repealed and re-enacted at N43.56 trillion. The revised figure comprises N1.74 trillion for statutory transfers, N8.27 trillion for debt service, N11.27 trillion for recurrent (non-debt) expenditure, and N22.28 trillion for capital expenditure and development fund contributions for the year ending December 31, 2025.
Similarly, the President proposed the repeal of the 2025 Appropriation Act of N54.99 trillion and its re-enactment at N48.32 trillion.
Tinubu said the reworked 2025 budget consists of N3.65 trillion for statutory transfers, N14.32 trillion for debt service, N13.59 trillion for recurrent (non-debt) expenditure, and N16.71 trillion for capital expenditure and development fund contributions.
The re-enacted 2025 budget is expected to run until March 31, 2026, instead of December 31, 2025.
President Tinubu explained that the proposed repeal and re-enactment were intended to accommodate budget items not previously recognised and to reflect a revised capital implementation target of 30 per cent.
He said the adjustment aligns with current fiscal realities and execution capacity, while ensuring credible and transparent budget performance. According to him, the extension of the 2025 budget would allow for the full release of the targeted 30 per cent capital funds across all ministries, departments and agencies (MDAs).
The President noted that the move forms part of broader fiscal reforms aimed at eliminating the overlap of multiple concurrently running budgets, improving planning, strengthening execution and enhancing accountability in public expenditure.
He added that the bills also seek to reinforce implementation discipline by ensuring that appropriated funds are released strictly for their approved purposes, limiting virement to cases approved by the National Assembly, and setting conditions for corrigenda where genuine errors may affect implementation.
Other provisions include separate recording of excess revenue, restricting its expenditure to legislative approval, mandatory compliance with due process, and periodic reporting on fund releases and agency-generated revenues.
Tinubu informed the House that the submission supersedes an earlier letter transmitted to the House, dated December 16, 2025, and urged lawmakers to consider and pass the bills expeditiously.
Expert faults 2025 budget rollover into 2026
Economic experts have raised fresh concerns over the decision to roll over Nigeria’s 2025 budget into 2026, warning that the move could weaken fiscal discipline and slow national development.
The rollover, approved after delays in budget implementation, allows uncompleted projects and spending plans from 2025 to continue into the new fiscal year.
According to analysts, running two budgets at the same time creates confusion and makes it harder to track spending.
“This has become a recurring issue,” said an economist who spoke on condition of anonymity. “A budget is supposed to be a one-year plan. When it spills into another year, it shows weak coordination and poor implementation capacity.”
An economist, Dr Marcel Okeke described the current situation as “fiscal anomaly.” He said it smacks of lack of transparency and reduces credibility in government.
Speaking to Weekend Trust yesterday, Okeke said, “All what they are doing is reducing the credibility of the government itself as far as the people are concerned. They did not even tell us how far this year has gone. It depends on the credibility and transparency of the government. So if they are credible and transparent, why must they not tell the Nigerians how far they have gone with the 2025 budget?
“So they are not transparent and they are not credible. The budget belongs to Nigeria and Nigerians so also when they are presented a new one there should be a proper update on the current one.
“How far will the implementation go? That they have not done that is a serious failure on their own part. And moving part of this year’s budget to next year is part of what you can call fiscal rascality. The budget for this year is not meant for next year.
“The conditions that will actually manifest next year are not necessarily with what is on ground this year that informed the budget for this year. 2026 is a pre-election year and so it has its own characteristics, it has a lot of issues that dominate the ecosystem.
“So moving anything into 2026 when it’s not planned for 2026 means that it’s being made an emergency, whatever it is that is being pushed into that year, it’s being made an emergency. And once you move budget into another year, all the guides around spending, around activities on that budget for this you know so everything is a matter of verbal instruction, my friend go ahead and do this my friend go ahead and do this my friend, it is no longer properly guided by the law when in fact the budget is a law, that is why it’s called the Appropriation Act.
“So by the time you move it into next year, it becomes an emergency and instructions will no longer follow the laws rigidly because they have been moved to the next year as an emergency. It’s an emergency arrangement. It’s an emergency situation. So those are the issues.
“If the Muhammadu Buhari administration did not achieve anything, it succeeded in regularizing the budget cycle – from January to December each year. You understand? Yes. No matter how it failed in any other thing, it succeeded in regularizing that. So you can now see that it is the current administration that has started messing things up by not implementing the budget accordingly. So it is the current administration that is messing things up – 2023, 2024 and 2025 now 26.”
According to him, the current administration has made poor budget implementation a way of life.
“As a matter of fact they have made it their normal way of doing things and it faces a lot of challenges because when budgets don’t come out when they are supposed to come out, there are many stakeholders who take cue from the federal budget. State governments are supposed to look at the budget assumptions of the federal government in making their budget.
“What will a state government for example assume to be the oil price? It is the national budgets that will share that.
“What will a state government assume to be the exchange rate, it is the national budget that will say that. So when the federal government has not released anything, what will the sub-national governments look at to do their own budgets?
“And then our development partners outside the country will not have anything to look at because the national government has not released anything. Serious businesses, organisations and companies in Nigeria here, in doing their own planning they use that data to do their own planning.”
A financial analyst from Lagos, Muktar Mohammed, Chief Executive Officer of Finance with Muktar, while featuring Trust TV last night, described the capital expenditure in the proposed budget for 2026 as impressive.
“For the first time, we are seeing about N25 trillion in capital expenditure. It appears capital expenditure is higher than recurrent expenditure and possibly higher than debt servicing, which is good,” he said.
He said with the projected revenue of over N34 trillion and expenditure of over N58 trillion indicated that “we are going to borrow. The questions are: how are we going to borrow? Which projects are we borrowing for? And how much debt are we taking on? This shows a recycling of debt payments that could impact subsequent budgets.”
He stated: “Overall, yes, the budget still has serious challenges. My major concern is how this budget will be funded given the huge revenue shortfall. When you look at projected revenue sources like capital gains tax and taxation generally, these policies have not yet fully taken off. We don’t even know if by January there will be 100 percent implementation of the new tax law.
Those are major challenges. On the positive side, security continues to receive attention, as it has over the past four years. However, if the results are not commensurate with the amount being spent, then there’s a problem. The president was strong on security and promised improvement, and hopefully we’ll see that.”
Akpabio urges Tinubu to review police withdrawal from VIPs
Meanwhile, Senate President Godswill Akpabio, has appealed to President Bola Ahmed Tinubu to reconsider the recent directive ordering the withdrawal of police personnel attached to VIPs, warning that the decision could expose lawmakers to security risks.
President Tinubu had instructed the Inspector-General of Police, Kayode Egbetokun, to withdraw police officers from non-essential duties, including escorts assigned to VIPs.
However, speaking at the end of his welcome address during the President’s visit to the National Assembly to present the 2026 budget on Wednesday, Akpabio raised concerns over the implications of the move for legislators.
He said several members of the National Assembly feared they might be unable to return to their constituencies without adequate security protection.
“As we direct the security agencies to withdraw policemen from critical areas, some members of the National Assembly said I should let you know that they may not be able to go home today,” Akpabio said.
“They could be exposed to danger. On that note, we plead with you, Mr President, to kindly review the decision,” Akpabio added.
Earlier in his remarks, the Senate President acknowledged that insecurity continues to test Nigeria’s collective resolve, noting that many communities across the country remain burdened by violence and criminal activities.
He stressed that Nigeria’s strength lies in unity and cooperation between institutions of government.
Akpabio drew lessons from history, arguing that nations make progress when the executive and legislature work together in the national interest, but stagnate when rivalry replaces cooperation.
He said the National Assembly remained committed to partnering with the executive to strengthen security frameworks and ensure the safety of Nigerians.
The appeal came amid renewed debate over the balance between reducing the misuse of police personnel and ensuring adequate protection for public officials in a challenging security environment.
Abbas urges realistic targets, job creations in 2026 budget
The Speaker of the House of Representatives, Abbas Tajudeen Abbas, has urged the Federal Government to anchor the 2026 budget on realistic assumptions and credible targets, stressing that economic growth must translate into job creation, higher incomes and expanded opportunities for Nigerians.
Abbas made the call on Friday in his closing remarks after President Bola Ahmed Tinubu presented the 2026 Appropriation Bill to a joint session of the National Assembly.
He said the key task before policymakers is no longer whether economic reforms are working, but how quickly and decisively their benefits can be consolidated and felt by ordinary citizens.
“If 2025 was a year of adjustment and learning, 2026 must be a year of fulfilment. Growth must increasingly translate into jobs, higher incomes and expanded opportunity,” the Speaker said.
He emphasised that fiscal discipline must deliver fairness, efficiency and visible impact, adding that the 2026 budget should be implemented with discipline to achieve tangible results.
According to him, there is growing optimism in the National Assembly that the coming fiscal year would mark a shift from intent to outcomes, provided the budget is grounded in realism and faithfully executed.
Abbas also commended President Tinubu’s insistence on operating one budget and one fiscal framework, noting that the approach eliminates parallel spending structures and restores order to public finance.
He said the National Assembly was reassured that the 2026 budget is not only ambitious but also achievable and precisely targeted, rather than built on approximations.
The Speaker further highlighted security as the foundation of development, welcoming the administration’s declaration of emergency in the sector and the commitments to improved recruitment, welfare, training and intelligence coordination.
He assured the President that the National Assembly would give the 2026 Appropriation Bill urgent, diligent and patriotic consideration, while insisting on accountability and value for money.
PDP demands accountability in execution
The Peoples Democratic Party (PDP) yesterday called for increased transparency and accountability in the administration of Nigeria’s finances which, it alleged, had been absent so far under the Tinubu administration.
Its National Publicity Secretary of PDP, Ini Ememobong, in a statement, noted that financial accountability and transparency are critical to public trust-building and effective public administration.
The party alleged that the 2026 Appropriation Bill presented by Tinubu to the National Assembly would consolidate the sufferings of Nigerians.
It described the fiscal document as consolidated renewed sufferings “because what Nigerians have witnessed since the birth of this administration is nothing but unmitigated hardship on the people, while the governing class relishes in affluence.
“Nigerians have suffered greatly from many economic woes under this administration.
“President Tinubu cited a 3.98% GDP growth rate as evidence of economic stabilisation under his administration. However, it is well established that economic growth alone does not and cannot guarantee improved living standards for citizens. According to the 2025 World Bank Poverty & Equity Brief, more than 30.9% of Nigerians live below the international extreme poverty line. This shows that there is growth without prosperity for our citizens, meaning that despite GDP growth, poverty remains endemic.This clearly indicates that whatever economic gains exist are not reaching the majority of Nigerians.
“Today, the president celebrates a 3.98% growth rate, whereas a reality check reveals excruciating hunger, a high cost of living, and other indices of economic hardship, which Nigerians are currently facing.
“While we acknowledge the security allocation in the 2026 budget, we must remind the government and Nigerians that allocation alone is insufficient. We therefore demand effective and transparent execution to ensure that security funding translates into tangible improvements -modern equipment, adequate ammunition, improved intelligence capabilities, and better welfare for security personnel who are currently engaged in different theatres of armed conflict, where criminal non-state actors are alleged to possess superior arms compared to our security forces.
Overall, we are deeply concerned about the unapologetic admission by the president that the execution of the 2024 capital budget had been extended to December 2025, while the 2025 budget is still in force.
“This confirms the long-standing rumours of the concurrent operation of multiple budgets. This cannot be described as best practice, as every budget has a defined period of operation and no two budgets should operate concurrently. The operation of different budgets at the same time undermines fiscal discipline, transparency, and accountability. These multiple budgetary regimes show yet another unprecedented negative feat by this APC Bola Tinubu-led administration.”
By Saawua Terzungwe, Itodo Daniel Sule, Baba Martins (Abuja) & Abdullateef Aliyu (Lagos)