Thursday, December 4, 2025 - Economic analysts have expressed grave concern over Nigeria’s newly approved 2026–2028 Medium-Term Expenditure Framework, warning that the Federal Government’s plan to run a record N20.10trn deficit in 2026 could worsen the country’s fragile economic conditions and trigger a fresh debt emergency.
Their warnings followed the Federal Executive Council’s
endorsement of a proposed N54.43trn expenditure plan for 2026, with debt
servicing alone projected at N15.91trn, almost one-third of the entire budget.
Experts note that the planned deficit exceeds the entire 2022 national budget
by nearly N3trn, signalling what they describe as a dangerous fiscal overreach.
Briefing State House correspondents after the FEC meeting,
Minister of Budget and Economic Planning, Atiku Bagudu, said the framework was
anchored on a projected revenue of N50.74trn, a crude oil benchmark of $64.85
per barrel and an exchange rate of N1,512/$1. He added that the MTEF would be
transmitted to the National Assembly on Monday.
Bagudu explained that the Federal Government’s projected
share of revenue stands at N34.33trn – 16 per cent lower than the 2025 figure.
Key expenditure items include N3trn in statutory transfers, N15.27trn in
recurrent spending and N15.91trn earmarked for servicing debt obligations. He
also disclosed the adoption of dual crude production targets: a 2.06mbpd
industry projection and a more conservative 1.8mbpd benchmark.
However, economists say the fundamentals of the plan expose
Nigeria to significant fiscal danger.
With expenditure set at N54.43trn against revenue of
N34.33trn, the government will be running a deficit more than twice the size of
the N9.22trn shortfall recorded in 2025.
To underscore the scale of the imbalance, analysts point out
that Nigeria’s 2026 debt service provision of N15.91trn is four times the
N3.98trn spent in 2022.
Dr Muda Yusuf, CEO of the Centre for the Promotion of
Private Enterprise, told Punch that Nigeria risks slipping into a full-blown
debt trap if it continues on this trajectory.
“We need to worry about debt sustainability,” Yusuf said.
“High deficits and high debt levels can choke the fiscal space and threaten the
fragile stability we have achieved.”
He warned that Nigeria’s recent macroeconomic gains could
unravel if borrowing escalates, stressing that inflation and exchange rate
pressures could intensify.
According to him, the government must “leverage improved
revenue performance to moderate the deficit” instead of widening it.
Also reacting, Professor Sheriffdeen Tella of Olabisi
Onabanjo University faulted the rationale behind preparing the 2026 budget when
the 2025 budget had barely taken off.
He described the N20trn deficit figure as “cooked up” and
condemned what he termed the persistent collapse of the country’s budgeting
timeline.
“The 2026 budget is supposed to be premised on 2025
performance. But they have only just started implementing the 2025 budget in
December,” he told Punch.
Tella warned that the country risks operating multiple
overlapping budgets, which he said reflects deep fiscal disorder and undermines
the credibility of government planning.
Analysts broadly agree that unless urgent reforms are
introduced to restore discipline and rein in Nigeria’s fast-rising debt
profile, the 2026 fiscal year could mark a severe downturn in the country’s
economic stability.
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