Nigeria's 2026 budget deemed unviable by BudgIT

Nigeria's proposed 2026 budget, with an expenditure of N68.3 trillion, has been critically assessed by the civic tech organization BudgIT as "ambitious, but unrealistic" and unviable. The organization's analysis reveals a projected fiscal deficit of N31.5 trillion, which is more than double the 3% limit stipulated by the Fiscal Responsibility Act.

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In practical terms, the government can only finance 53.9 per cent of its budget from actual revenues, leaving 46.1 per cent dependent on borrowing and loans.

BudgIT's statement points out that the government can only finance 53.9% of its planned spending through actual revenues, leaving a substantial 46.1% reliant on borrowing and loans. This situation suggests a deeply embedded structural fiscal imbalance within Nigeria's financial framework, despite repeated warnings from observers.

The government's plan to execute its largest spending program ever hinges on a combination of revenue generation and significant borrowing. President Bola Tinubu's initial budget proposal of N58.5 trillion was later increased to N68.3 trillion to accommodate pending capital projects and outstanding obligations. However, Nigeria's history of underperforming revenue projections, often falling short by over 30%, raises serious concerns about the feasibility of the current budget.

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One can reasonably infer a structural fiscal imbalance that has, despite several warnings from observers, become embedded in Nigeria’s fiscal framework.

Furthermore, the budget allocates N15.8 trillion to debt servicing, consuming approximately 45% of the target revenue and 23% of total expenditure. BudgIT warns that this heavy debt burden could severely restrict fiscal space, pre-committing a large portion of government earnings and hindering investments in critical sectors. Public debt has surged dramatically, increasing by 380.9% from N33.1 trillion in 2021 to N159.3 trillion by 2025.

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The key issue is implementation, and reforms are central to improving revenue mobilisation and execution capacity.