N58.47tn 2026 Budget: Edun defends oil benchmark, borrowing plan
Minister of Finance and Coordinating Minister for the Economy, Dr. Olawale Edun on Tuesday defended budget assumptions for the N58.472 trillion 2026 Appropriation Bill. Edun spoke when he led the
- …as NRS boss, Adedeji, warns against inflated revenue targets
Minister of Finance and Coordinating Minister for the Economy, Dr. Olawale Edun on Tuesday defended budget assumptions for the N58.472 trillion 2026 Appropriation Bill.
Edun spoke when he led the Federal Government’s economic management team to appear before the Senate Committee on Appropriations on the 2026 budget defence.
Appearing before the Senate Committee on Appropriations chaired by Senator Solomon Adeola (Ogun West), Edun said security spending had been prioritised in the 2026 budget, stressing that emergency funding had consistently been released for critical military procurements.
“We all agree that security is to be prioritised. I can assure you that emergency funding has been given. Critical foreign payments for security equipment have been made at least twice this year that I know of, including as recently as yesterday,” he said.
He explained that some security expenditures might not be immediately visible under conventional budget classifications, but insisted that urgent obligations were being met through the Federation Account within approved fiscal limits.
On the oil production benchmark of 1.84 million barrels per day underpinning the 2026 budget, Edun described the figure as a “stretch target” designed to drive performance.
“It is a stretch target so that the authorities do not settle for lower output. But as long as we do not spend what we do not have, we are within safe limits,” he said.
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He added that forward crude contracts were standard practice globally and structured to ensure future production obligations were met with sufficient margins, warning against leaving commodities idle.
“Some countries that left their commodities underground have seen their value decline over time,” he cautioned.
Responding to concerns on debt servicing, Edun said Nigeria’s major challenge was not necessarily its debt-to-GDP ratio but the high cost of borrowing in international markets.
“The problem is the pricing. Developing countries are forced to pay high interest rates in international markets. That is where the difficulty lies,” he said.
He disclosed that Nigeria was chairing the technical group meeting of the G24, where debt sustainability and rising interest costs were dominating discussions.
He added that President Bola Ahmed Tinubu had called for the establishment of an African credit rating agency to ensure fairer assessments and more affordable financing for African economies.
Edun also warned that fiscal discipline and monetary credibility were critical to sustaining macroeconomic stability.
“When this administration came in 2023, we were paying heavily to stabilise the system. You cannot undermine interest rate mechanisms without consequences. If you do not maintain credibility, the exchange rate will move,” he said.
According to him, the economy was showing signs of recovery, growing at about four per cent, with inflation trending downward, foreign reserves rising and exchange rate stability improving.
He cited renewed investor confidence, including a reported $20 billion investment commitment by Shell, alongside other private sector investments.
He said the government aimed to raise investment to 30 per cent of GDP to achieve about seven per cent annual growth and reduce poverty, adding that increased private sector participation in infrastructure would reduce pressure on public borrowing.
However, senators faulted the economic team over persistent budget implementation challenges, particularly zero or minimal releases of capital votes to Ministries, Departments and Agencies (MDAs).
The committee raised concerns over the realistic implementation of the 2026 budget and demanded that the capital components of the 2024 and 2025 budgets be concluded by March 31, 2026.
Edun’s explanation that the capital components of the 2024 and 2025 budgets were still being funded did not satisfy the lawmakers.
The Chairman of the Nigeria Revenue Service (NRS), Dr. Zacch Adedeji, warned that unrealistic assumptions would continue to undermine implementation.
“Budget funding must come from realistic projections. Efficiency is not about the size of the budget but about how much can actually be implemented,” he said.
He added, “If you think you have ten units and spend accordingly, that is manageable. But if you assume you have one hundred and spend based on that assumption, you may run into serious problems if the funds do not materialise.”
Earlier, he stressed that inflated revenue assumptions distorted fiscal planning.
“Budget efficiency is not in the quantum of the budget; it is in what you can carry out. If we think we have 10 naira and we plan with 100 naira in mind, we will create problems for ourselves. The starting point must be realistic assumptions,” he said.
Adedeji explained that under the Petroleum Industry Act framework, the Nigerian National Petroleum Company Limited (NNPCL) now operates as a limited liability company and government revenue from oil production comes mainly from taxes and royalties rather than gross crude sales.
“The only connection between the government and whatever is produced is the taxes and royalties paid. If production costs are high, the net revenue to the government is affected,” he said.
He disclosed that projections indicated about 47 per cent of total oil company output would translate into government revenue under current fiscal arrangements, urging lawmakers to focus on cost structures and enforceable fiscal parameters.
Senator Adeola insisted that the 2026 budget document originated from the executive and must reflect credible assumptions.
“This document before us originated from the executive. The projections and challenges came from the executive arm, not the legislature,” he said.
He questioned the wide gap between projected and realised oil revenues in previous fiscal years, citing 18 per cent performance in one year and projections of 36.5 per cent in another, compared with much higher expectations.
“For example, how do we explain 18 per cent performance in one year and projections of 36.5 per cent the next year when actual performance is still below expectations?” he asked.
Adeola posed a key question on the 2026 budget size: “So the question is: Do we reduce the N58.472 trillion 2026 budget, or do we proceed and make adjustments?”
He also raised concerns about Nigeria’s debt stock, estimated at N152 trillion, suggesting asset sales to reduce borrowing costs.
“If certain assets were disposed of and used to reduce debt, two things would happen: the overall debt stock would reduce, and future borrowing costs could also decline,” he said, urging the finance minister to “speak from the heart” on necessary adjustments.
Minister of State for Finance, Dr. Doris Nkiruka Uzoka-Anite, assured lawmakers that the capital components of the 2024 and 2025 budgets would be fully implemented before March 31, 2026.
“Regarding the 2025 budget, funding processes are beginning. Payments for outstanding 2024 capital projects start today,” she said.
She added, “The financial management system is back online. For 2025, MDAs have been asked to upload their cash plans by Monday, after which payments will commence. We are ready to start, but the MDAs must complete their documentation requirements.”
The committee later held a closed-door session with the economic team for about two hours to review sensitive fiscal details and possible adjustments to the budget framework.
The Minister of Budget and Economic Planning, Senator Atiku Bagudu, and the Accountant-General of the Federation, Mr. Shamsedeen Babatunde Ogunjimi, were also in attendance.
The engagement ended with Edun reiterating the executive’s commitment to meeting approved targets and working with the National Assembly to ensure that the 2026 Appropriation Bill reflects realistic revenue assumptions, credible implementation plans and sustainable fiscal management.
