The Federal Executive Council (FEC) has approved an upward review of the 2026 national budget, increasing the proposed expenditure from ₦54.5 trillion to ₦58.47 trillion. The decision was taken during an emergency meeting chaired by Vice President Kashim Shettima at the Council Chamber of the State House, Abuja.
Briefing State House correspondents after the session, Director-General of Budget, Tanimu Yakubu, explained that the revised 2026 appropriation is six per cent higher than the 2025 budget estimate. The budget includes projected spending by government-owned enterprises totaling ₦4.98 trillion and ₦1.37 trillion earmarked for grants and donor-funded projects.
Yakubu highlighted the main components of the aggregate expenditure, which include:
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Statutory Transfers: ₦4.1 trillion
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Debt Service: ₦15.52 trillion, including ₦388.54 billion for the sinking fund to retire maturing bonds issued to local contractors and creditors
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Personnel Costs (including pensions): ₦10.75 trillion, of which ₦1.02 trillion is allocated to government-owned enterprises—representing a seven per cent increase over 2025
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Overhead Costs: ₦2.22 trillion
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Capital Expenditure: ₦25.68 trillion, 1.8 per cent lower than the 2025 allocation, reflecting a focus on completing ongoing projects
He further explained that capital allocations prioritize major developmental sectors, including ₦11.3 trillion for the Medium-Term Development Strategy (MDS), ₦2.052 trillion for multilateral and bilateral loans, and ₦1.8 trillion from the capital component of the development levy.
Yakubu noted that the 2026 budget seeks to strike a balance between macroeconomic stability and developmental imperatives within the medium-term fiscal framework. He described the revenue assumptions as conservative and realistic, particularly regarding oil prices, exchange rates, and dividends from government-owned enterprises.
“While revenues show a slight decline compared to previous years, non-oil revenues now make up roughly two-thirds of total receipts, indicating a structural shift away from oil dependence. Corporate taxes, VAT, customs duties, and independent revenues remain the main fiscal anchors,” he said.
He added that the growth in expenditure is largely driven by debt service, wages, and pensions rather than discretionary spending, and that capital spending has been marginally reduced to ensure ongoing projects are completed efficiently. The projected larger budget deficit, according to Yakubu, reflects structural priorities rather than a loosening of fiscal policy. Financing will rely on domestic borrowing, complemented by concessional multilateral loans.
Earlier, Minister of Budget and Economic Planning, Atiku Bagudu, stated that FEC also approved amendments to the Medium-Term Expenditure Framework (MTEF). He confirmed that the Council considered a downward revision of the exchange rate from ₦1,512 to ₦1,400 as part of its fiscal planning for 2026.
The upward adjustment of the budget is expected to provide greater fiscal space for priority projects while maintaining a focus on debt sustainability, value-for-money expenditure, and economic stability.
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