Nigeria's 2026 budget deficit exceeds legal limit, BudgIT report finds

Nigeria's approved 2026 budget projects a fiscal deficit exceeding the legal limit, raising concerns about the nation's financial sustainability, a new report by civic technology organization BudgIT reveals. The budget anticipates revenue of N36.87 trillion against total expenditure of N68.32 trillion, leaving a financing gap of N31.45 trillion, which is 6.41% of the country's Gross Domestic Product.

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The projected deficit is more than double the three per cent ceiling stipulated under the Fiscal Responsibility Act, raising fresh concerns over the sustainability of Nigeria’s public finances.

This projected deficit is more than double the three percent ceiling stipulated by the Fiscal Responsibility Act. BudgIT's report, titled "Federal Government Approved Budget Analysis 2026," also questions the budget's underlying assumptions, particularly ambitious revenue projections that could worsen the national debt if unmet. The government expects to fund only about 53.9% of proposed expenditures from revenues, relying heavily on borrowing for the remainder.

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The government was expected to finance only about 53.9 per cent of the proposed expenditure from projected revenues, leaving the balance to be financed largely through borrowing.

The organization further expressed alarm over increasing poverty levels, noting that the number of Nigerians living in poverty rose from 40 million in 2019 to 56 million in 2023, with rural communities bearing the brunt. BudgIT urged the government to prioritize investments that boost economic productivity, enhance social protection, and support small and medium-scale enterprises.

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The number of Nigerians living in poverty increased from 40 million in 2019 to 56 million in 2023, with rural communities remaining disproportionately affected.

Additionally, the report criticizes the budget allocations for critical sectors like health and education, which remain significantly below international benchmarks. The health sector received only about five percent of the national budget, far short of the 15% Abuja Declaration target, while education accounts for approximately four percent. BudgIT warned that this chronic underinvestment hinders healthcare delivery, exacerbates school infrastructure deficits, and limits human capital development.

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The health sector received only about five per cent of the national budget, far below the 15 per cent Abuja Declaration target, while education accounts for approximately four per cent of total spending.