Senate Declares End to Approving Budget Extensions

The Senate has formally announced that the National Assembly will no longer sanction extensions of the budget implementation period. This declaration was made by Solomon Olamilekan Adeola, who chairs the Senate Committee on Appropriations, on Monday.

During a public hearing focused on the 2026 Appropriation Bill, Adeola emphasized the need for strict adherence to budget timelines, highlighting the importance of better coordination between policy formulation and execution. The session was attended by notable figures, including Dr. Doris Nkiruka Uzoka-Anite, Minister of State for Finance, and Shamseldeen Olujimi, the Accountant General of the Federation, along with various economists and senior government officials.

“Moving forward, the National Assembly will not approve any further extensions of budget timelines. It is crucial that we ensure strict compliance with our budgeting schedules and enhance coordination in policy design and implementation,” Adeola affirmed.

The senator defended the necessity of borrowing to address budget shortfalls, despite public discontent, explaining that the economic hurdles and infrastructural deficits in Nigeria necessitate such actions. However, he urged for a shift towards smarter and more sustainable debt financing methods.

“Nigeria’s borrowing practices are essential given the unpredictability of revenue inflows and the overwhelming development needs of the country. It's crucial to consider the methods we use to borrow and how we manage our deficits,” he noted.

Adeola acknowledged that debt servicing poses significant challenges, emphasizing that Nigeria must fulfill its financial obligations to maintain its sovereign credit rating and uphold its global economic reputation.

To mitigate reliance on domestic borrowing, which he warned could hinder private sector credit availability, he stated that the government is exploring strategies such as asset optimization, privatization, Public-Private Partnerships (PPPs), leveraging joint ventures, and issuing Eurobonds.

Dr. Olatilewa Adebanjo, an economist and fiscal policy analyst, cautioned that Nigeria's escalating budget deficit may soon reach unsustainable levels unless rapid improvements are made in revenue generation and fiscal discipline.

He advocated for a thorough review and stricter enforcement of the Fiscal Responsibility Act (FRA), a tool he described as powerful yet underutilized in managing fiscal policies. Furthermore, he raised concerns about significant revenue shortfalls in the mining and solid minerals sectors, claiming that foreign entities, particularly from China, are extracting Nigeria's resources with inadequate returns for the country.

Adebanjo criticized the unrealistic revenue expectations set forth in government budgets, stressing the necessity for budgeting based on realistic and achievable financial forecasts.

Moreover, Hon. Bashir Abubakar, the Chief Commissioner of the Public Complaints Commission (PCC), stated that robust accountability and legislative oversight are vital for tackling budget deficits and preventing wastage. He pointed out that ongoing issues with abandoned projects, inflated contract costs, and poor project execution deepen fiscal pressure and undermine public confidence.

In response to these challenges, Senator Adeola called on the executive branch to actively engage in Public-Private Partnerships, particularly focusing on infrastructure development, to alleviate the burdens on public finances.

Adeola also advocated for the complete unbundling of the electricity sector and the removal of subsidies to unlock substantial resources for vital projects. He pointed out that states now have the authority to generate electricity, calling for subsidy reforms in the power sector to enable increased revenue for national development.

“Immense sums have been spent on fuel subsidies annually, often using borrowed funds. The recent removal of subsidies by the President is a significant step towards necessary reforms,” he remarked.

Regarding the N58.47 trillion budget for 2026, Adeola highlighted that it is based on ongoing reforms, including the removal of subsidies, tax overhauls, public finance restructuring, and electricity reforms, deeming it a "Budget of Consolidation."

He articulated that Nigeria's budgeting system needs to evolve into a more strategic and disciplined structure akin to global best practices to effectively allocate limited resources against pressing development demands. He referenced the Ministry of Works, stating that while it may receive N500 billion, the actual infrastructure needs exceed N2 trillion.

“This discrepancy complicates effective planning. We must prioritize essential sectors and avoid overwhelming demands that are unsustainable,” he commented.

For the 2026 fiscal year, the aggregate expenditure is projected at N58.47 trillion, against expected revenue of N33.19 trillion, resulting in a deficit of N25.27 trillion. Debt servicing is expected to account for N15.90 trillion, while capital expenditure is set at N23.21 trillion to demonstrate the government's commitment to enhancing infrastructure and productivity.

He explained that key assumptions include an inflation target of 16.5 percent, a stabilized exchange rate around N1,400 per dollar, oil production set at 1.84 million barrels per day, and a benchmark oil price of $64.85 per barrel.

Priority funding allocations will include N5.41 trillion for defense and security, N3.56 trillion for infrastructure, N3.52 trillion for education, and N2.48 trillion for health, underscoring that effective execution can stimulate private investment, generate employment, and elevate the quality of life.

In his address, the Accountant General of the Federation urged a focus on outcomes rather than the scale of projects when preparing budgetary proposals. "Success should not be measured solely by the number of roads or institutions funded, but by the functionality of classrooms, operational healthcare centers, electricity delivered, and jobs created,” Olujimi stated.

The Minister of State for Finance, who represented the Finance Minister and the Coordinating Minister of the Economy, along with the Minister of Budget and National Planning, stressed that the 2026 budget aims to maximize the impact of limited resources to yield significant benefits for the economy and the populace.

“Nigeria's debt-to-GDP ratio, approximately 36 percent, remains below global standards, with the key challenge being the costs associated with borrowing and debt servicing,” the minister noted, while expressing concern over public dissatisfaction stemming from rising living expenses.

He described the outlook for 2026 as "cautious yet optimistic," projecting GDP growth at around 4.5 percent, with gradual improvement thereafter, and anticipating a noticeable reduction in inflation rates by the year's end.

Senator Godswill Akpabio, the Senate President, represented by Deputy Senate President Senator Barau Jibrin, emphasized that future budgets must prioritize not just fiscal allocations but also tangible outcomes.