Senate okays N54.46trn spending plan, N17.88trn new borrowing

The Senate yesterday approved far-reaching recommendations of its Committee on Finance, endorsing a N54.46 trillion federal spending frame­work for 2026 and a new borrowing plan of N17.88 trillion which constitutes both domestic and foreign borrowings.

 

It revised Nigeria’s crude oil bench­mark price downward to $60 per barrel, in a move aimed at insulating the econo­my from global volatility, reports Daily Independent.

 

The approval followed the consider­ation and adoption of the report on the Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) for 2026–2028, presented at plenary by the Chairman of the Senate Committee on Finance, Senator Sani Musa, during a session presided over by Senate President Godswill Akpabio. ­

 

In a key decision reflecting heightened global uncertainty, the Senate reduced the crude oil benchmark price earlier pro­posed at $64.85 per barrel for 2026 to $60, while approving $65 and $70 per barrel for 2027 and 2028, re­spectively. The committee said the downward review was informed by geopolitical tensions in Europe and the Middle East, as well as the sensitivity of global oil prices to external shocks.

 

Despite the conservative oil price outlook, lawmakers retained domestic crude oil pro­duction projections of 1.84 million barrels per day (mbpd) for 2026, 1.88mbpd for 2027 and 1.92mbpd for 2028, expressing confidence in ongoing sectoral reforms and efforts to stabilise production.

 

On macroeconomic assump­tions, the Senate endorsed pro­jected exchange rates of N1,512 to the dollar in 2026, N1,432.15 in 2027 and N1,383.18 in 2028, align­ing with the Central Bank of Nigeria’s (CBN) policy direction to stabilise the naira through improved fiscal and monetary coordination.

 

Inflation is projected to decline steadily over the medium term, with rates of 16.5 percent in 2026, 13 percent in 2027 and nine per­cent in 2028. The committee at­tributed the outlook to the com­mitment of monetary authorities to rein in inflationary pressures.

 

Similarly, the Senate sustained real GDP growth projections of 4.68 percent for 2026, 5.96 percent for 2027 and 7.9 percent for 2028, citing ongoing economic reforms and anticipated gains from tax reforms expected to take firmer effect from 2026.

 

A major highlight of the re­port was the emphasis on the ef­fective implementation of newly enacted tax laws as instruments for economic reform and growth.

 

In this regard, the committee recommended the adoption of a National Scanning Policy within the National Single Window of the Nigeria Revenue Service, in collaboration with relevant agen­cies, to enhance revenue assur­ance, reduce leakages, improve transparency, facilitate trade and strengthen national security.

 

On fiscal operations, the Senate approved total federal expenditure of N54.46 trillion for 2026. Of this amount, the Federal Government retained revenue is estimated at N34.33 trillion, while new borrowings — both domestic and foreign — are projected at N17.88 trillion. Debt service ob­ligations are estimated at N15.52 trillion.

 

The framework also provides N1.376 trillion for pensions, gra­tuities and retirees’ benefits, while the fiscal deficit is pegged at N20.13 trillion.

 

Capital expenditure, exclu­sive of transfers, was sustained at N20.131 trillion, alongside stat­utory transfers of N3.152 trillion and a Sinking Fund provision of N388.54 billion. Total recurrent (non-debt) expenditure was ap­proved at N15.265 trillion, with special intervention funds for re­current and capital spending set at N200 billion and N14 billion, respectively.

 

Several senators commended the committee for adopting what they described as realistic and achievable budget assumptions.

 

Senator Mohammed Tahir Mongono said the revised param­eters reflected current economic realities, urging the Senate to fast-track approval of the MTEF and budget.

 

“We must fast-track approv­al of the MTEF and budget, as these are the foundation of the country’s economic aspirations,” Mongono said.

 

Senator Adetokunbo Abiru (Lagos East) praised the cautious approach to revenue projections, particularly the emphasis on non-oil revenue, noting that oil reve­nue performance had fallen short in recent years. He described the moderation of projected revenue for 2026 as prudent.

 

Senators Aminu Abas and Ad­ams Oshiomhole also supported the revised exchange rate and oil production assumptions, de­scribing them as more reflective of market realities and Nigeria’s historical production capacity.

 

In his remarks, Senate Presi­dent Godswill Akpabio thanked senators and committees involved in reviewing the MTEF and FSP, noting that while projections may be subject to future revisions, the approved framework provides a solid foundation for economic planning.

 

“We are hopeful that the approved recommendations will drive sustainable econom­ic growth, fiscal discipline and transparency in the coming years,” Akpabio said.

 

The Senate is expected to pro­ceed with further deliberations on the 2026 budget, with a view to finalising and passing it in the coming weeks to guide Nigeria’s economic strategy from 2026 to 2028.