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The Federal Executive Council (FEC) has approved a N58.47 trillion 2026 federal budget proposal for transmission to the National Assembly, alongside an amendment to the Medium-Term Expenditure Framework (MTEF) that revises the official exchange rate assumption to N1,400 to the dollar.
The approval was announced on Monday after the FEC meeting in Abuja, with President Bola Ahmed Tinubu expected to formally transmit the budget to the National Assembly later in the day.
Briefing journalists, the Minister of Budget and Economic Planning, Senator Abubakar Bagudu, said council members considered and approved both the 2026 budget proposal and the amended MTEF, including the downward revision of the exchange rate from N1,512 to N1,400 and the consequential changes to the budget size.
Providing details, the Director-General of the Budget Office, Tanimu Yakubu, said total aggregate expenditure for 2026 is projected at N58.47 trillion, representing a six per cent increase over the 2025 budget estimate.
He explained that the figure includes projected spending by government-owned enterprises (GOEs) of N4.98 trillion and N1.37 trillion for grant- and donor-funded projects.
According to Yakubu, key expenditure components include statutory transfers of N4.1 trillion; debt service of N15.52 trillion, which covers N3.38 trillion and N188.54 billion for the sinking fund to retire maturing bonds owed to local contractors and creditors; and personnel costs, including pensions, estimated at N10.75 trillion. Personnel costs are seven per cent higher than the 2025 provision and include N1.02 trillion for GOEs.
Overhead costs are projected at N2.22 trillion, while capital expenditure is estimated at N25.68 trillion, about 1.8 per cent lower than the 2025 capital allocation, reflecting what officials described as a more conservative approach focused on completing ongoing projects.
Capital allocations include N11.3 trillion for ministries, departments and agencies, N2.052 trillion from multilateral and bilateral loans, and N1.8 trillion from the capital component of the development levy.
Yakubu said the 2026 budget seeks to balance macroeconomic stabilisation with development priorities under the Renewed Hope Agenda. He noted that while total revenues are projected to decline year-on-year, non-oil revenues now account for about two-thirds of total receipts, signalling a structural shift away from oil dependence.
He added that corporate income tax, value-added tax, customs duties and independent revenues remain the main revenue drivers, while expenditure growth is largely driven by debt service, wages and pensions rather than discretionary expansion.
The larger fiscal deficit, he said, reflects legacy fiscal rigidities rather than policy loosening, with financing expected to rely mainly on domestic borrowing, supported by concessional multilateral loans.
