The Federal Executive Council (FEC), presided over by President Bola Tinubu, has approved the 2026 appropriation budget, with aggregate expenditure projected at N58.47 trillion — a six percent increase over the 2025 budget estimate.
Tanimu Yakubu, director-general of the budget office, announced while briefing journalists on Friday.
Yakubu said the proposed expenditure includes N4.98 trillion for government-owned enterprises (GOEs) and N1.37 trillion for grants and donor-funded projects.
Statutory transfers were put at N4.1 trillion, while debt service accounts for the largest share of spending at N15.52 trillion.
He noted that the debt service figure includes N3.38 trillion allocated to the sinking fund for retiring maturing local contractors and creditors.
“Personnel costs including pension: 10.75 trillion naira, which includes 1.02 trillion for government-owned enterprises and [is] seven percent higher than the 2025 provision. Overhead cost stands at 2.22 trillion naira,” Yakubu said.
“Capital expenditure: 25.68 trillion naira, 1.8 percent lower than the 2025 capital provision, reflecting a more conservative approach to capital planning and the focus on completing ongoing projects.
“Capital allocation priorities include MDAs 11.3 trillion naira, multilateral and bilateral loans 2.052 trillion naira, and the capital component of the development levy: 1.8 trillion naira.”
The DG said the 2026 budget reflects a deliberate balance between macroeconomic stabilisation and development imperatives and the medium-term fiscal framework.
According to Yakubu, budget assumptions are conservative and realistic, particularly on oil price, exchange rate, and government-owned enterprises dividends.
“Revenues decline year on year, but non-oil revenues now account for roughly two-thirds of total receipt, confirming a structural shift away from oil dependence. Corporate tax, VAT, customs, and independent revenues remain the main fiscal anchors,” he added.
“Expenditure growth is driven primarily by debt service, wages, and pensions rather than discretionary expansion. Capital spending is marginally reduced to prioritize completion of ongoing projects and value for money.”
The DG said the larger deficit reflects prudence rather than policy loosening, noting that it would be financed mainly through domestic borrowing alongside concessional multilateral loans.
