Taiwo Popoola, Olaleye Idowu

Even though not without concerns, President Bola Ahmed Tinubu’s proposed N58.47 trillion budget for the 2026 fiscal year on Friday, has drawn both optimism and pessimism as stakeholders pinpoint major strengths and fault lines.

The breakdown of the budget proposal President Tinubu presented to the Joint Session of the National Assembly on Friday shows that Security and Defence received the highest allocation of N5.41 trillion, followed by Infrastructure with N3.56 trillion, Education with N3.52 trillion, and Health with N2.48 trillion.

The budget is anchored on projected revenue of N34.33 trillion, estimated expenditure of N58.18 trillion, and N15.52 trillion set aside for debt servicing.

Key assumptions underpinning the 2026 budget include an oil price benchmark of $64.85 per barrel, daily production of 1.84 million barrels, and an exchange rate of N1,400 to the dollar. The proposal represents a significant increase from the N43.56 trillion and N54.99 trillion budgets for the 2024 and 2025 fiscal years, respectively.

In separate interviews with newsmen, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, and Martins Badejo spoke on the strengths and fault lines of the 2026 budget proposal.

Yusuf described the 2026 budget as better structured than previous ones (2024 and 2025), noting that its assumptions are more conservative and realistic than those of 2025.

However, he cautioned that the oil price benchmark of $64.85 per barrel and production target still appear optimistic given Nigeria’s historical performance, calling for a downward review to enhance credibility.

He also urged the National Assembly to resist inflating the budget through constituency projects, warning that repeated upward revisions often undermine implementation and public trust.

According to him, the credibility of the budget is as important as its size.

Yusuf further identified weak non-tax revenue performance by government agencies as a recurring challenge and stressed the need to optimise revenue generation.

While acknowledging the President’s emphasis on fiscal consolidation, he expressed concern that debt servicing consumes nearly 50 percent of projected revenue, shrinking fiscal space and constraining development spending.

He also called for clarity on how the newly proposed 2026 budget would align with the recently reenacted 2025 Appropriation Act, warning against the risk of overlapping budget regimes.

While recurrent expenditure has largely been implemented in past budgets, he noted that poor capital budget execution continues to limit economic impact.

Beyond the federal level, Dr Yusuf stressed that state and local governments must also be held accountable, noting that many subnational governments now control sizable budgets capable of driving development in health, education, infrastructure, and agriculture.

“Well, I believe we should have a much better budget in 2026 than what has been presented. The assumptions on which the budget was based look to be a lot more realistic and a lot more conservative as compared to what we had in 2025. But it will not be a bad idea to further review the assumptions.

“$64 per barrel is still a bit on the optimistic side. If it can come down to $60, that will not be a bad idea. And the oil output of 1.8, given the historical level of performance, is also a bit on the optimistic side.

“So those assumptions are much more realistic, but they can be even more realistic. So I would rather suggest that we have a further review of those assumptions. Then we also need to appeal to the National Assembly not to inflate the budget.

“Because over the years, we have not had this arbitrary review or upward review of budgets as a result of these constituency projects. We should not allow that kind of thing to happen this year. Because the beauty of a budget is in the credibility of the budget.

“If we continue to have budgets that are poorly implemented, the budget itself will lose credibility, and it will lose trust. And I think the president alluded to that even in his speech to members of the National Assembly. So we have to be careful about throwing all manner of projects into the budget in a way that will now create huge expenditure expectations, which will not be met.

“Then, of course, one of the areas in which we have been having serious shortfalls is also from that performance of revenue. It’s in the area of revenue from generating agencies of government, which generate non-tax revenue. I think we need to optimise that.

“And I think, again, the President emphasised that. And those first steps will be taken to ensure that we optimise tax revenue that is from agencies of government that are generating that revenue. So if we put all of this together, I think optimising will improve the fiscal consolidation.

“But we need to worry about the burden of debt service. It underscores the need for us to review our debt management strategy and the need for us to also moderate the level or the rate of debt accumulation.

“Because debt servicing costs, even in this budget, are almost 50 percent of revenue.

“I mean, we cannot continue that way because that is shrinking the fiscal space. It’s also one of the factors affecting budget implementation. So that’s the percent of the things that we need to look at.

“Generally, it’s a good budget, but we need to look at these areas that I’ve just mentioned. And of course, the president recently re-enacted it. The 2025 budget authorises a release of about 43 trillion from the consolidated revenue account.

“Now, that has just been sent to the National Assembly in the form of another appropriation act.

“So we need to know how we are going to reconcile the new budget. and the one that the president recently sent to the National Assembly. I’m talking now about the enactment of the 2025 appropriation act. We need some clarity around that so that we know exactly where we stand and what to expect, so that we don’t have another cycle of multiple budget regimes.

“The past budget, of course, the implementation has been poor, and this has been clearly acknowledged even by the Finance Minister. Some projects were done, and according to the Finance Minister, I think 30 percent of the releases have been made. It remains 70 percent.

“So that, of course, has affected the capacity of the budget to impact productivity, and quite some projects, of course, were not able to be implemented as a result of those challenges. So the cent that has been taken, hopefully, will help to avoid a repeat of that experience that we had with the 2025 budget. But in all of this, we also need to realise or underscore the fact that the current part of the budget was almost fully implemented.

“When we talk about poor implementation, it’s essentially around the capital budget implementation. I think that clarity is important. We also need to underscore the point that fixing structural issues in the economy is not only the function of the federal government.

“So as we have conversations around the federal budget, we should be having conversations around the budget of the sub-nationals. Most of them have, in fact, practically all of them have more revenue now. So this will also come with impactful projects on health, on education, on roads, on rural development, on agriculture, you name it.

“They also have a major role to play. Because there’s a general tendency around the country that when we’re having conversations about the budget, we focus only on the federal budget. I think that mindset needs to change.

“We need to recognise that the states also have their own budgets. The local governments also have their own budgets. And they should be equally held accountable for what they do with these budgets.

“I mean, we now see states, many of them, having budgets of close to a trillion, even more than one trillion. I mean, that is quite significant. So we need to equally track all those budgets of the sub-nationals,” he told Newsmen.

On his part, Gbolade Idakolo stated that the N58.46 trillion proposal represents a bold step aimed at consolidating recent fiscal reforms, as a large portion of capital expenditure is expected to roll over into 2026.

He praised the prioritisation of defence and security, arguing that improved security is critical to investor confidence and sustainable growth.

Idakolo also welcomed the strong focus on infrastructure, education, and health, saying these sectors are central to job creation, productivity, and human capital development. According to him, the budget has the potential to stabilise and grow the economy if fully implemented with the timely release of funds.

He, however, advised the National Assembly to subject all projections and allocations to rigorous scrutiny to ensure realism and prevent implementation gaps.

“The N58.46 trillion 2026 budget is a bold step by the Federal government to consolidate its achievements in the last budget cycle, although over 70% of capital expenditure would be carried over to 2026, according to Minister of Finance, Mr Wale Edun.

“The budgetary allocations to defence, infrastructure, education, and health were the highest in that order, which shows the government’s determination to create a stable environment for growth.

“Security is very critical to investment growth and investors’ confidence, and the present insecurity being experienced in the country is a great disservice to economic growth and prosperity. Allocating the highest percentage of the budget and implementing the budgetary allocation can help to steady our growth trajectory.

“Infrastructure received the second-highest budgetary allocation, which also shows the seriousness of the government to deepen growth because with infrastructure comes development and job creation, which will effectively oil the economy.

“The education and health sector also received corresponding high budgetary allocations, and if properly implemented, will help us strengthen our human resources, which are our most valuable assets as a country.