2026 budget is unrealistic, says BudgIT

Civic tech group BudgIT has raised alarms about Nigeria's 2026 budget. They call it “ambitious, but unrealistic” and unworkable.

In a statement on Monday, BudgIT pointed out that the government expects to earn N36.9 trillion while spending N68.3 trillion. This means Nigeria will face a fiscal deficit of N31.5 trillion this year, which is 6.4 per cent of the gross domestic product.

This deficit is more than double the 3 per cent limit allowed by the Fiscal Responsibility Act.

BudgIT stated, “In practical terms, the government can only finance 53.9 per cent of its budget from actual revenues, leaving 46.1 per cent dependent on borrowing and loans.”

The group added, “One can reasonably infer a structural fiscal imbalance that has, despite several warnings from observers, become embedded in Nigeria’s fiscal framework.”

Nigeria is trying to implement its largest budget ever this year, using a mix of revenue and loans. President Bola Tinubu first proposed a budget of N58.5 trillion to lawmakers. He later increased it to N68.3 trillion after asking for an extra N9.1 trillion.

The president explained that this increase will help complete pending capital projects from earlier budgets and prevent any unpaid obligations from affecting the 2026 fiscal plan.

The country has not met its revenue targets for years, often falling short by more than 30 per cent. This trend has raised worries about the country’s financial plans.

Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, said in April, “The key issue is implementation, and reforms are central to improving revenue mobilisation and execution capacity.”

BudgIT, which aims to promote transparency in Nigeria's public finances, said the N36.9 trillion revenue target seems unrealistic. This is due to Nigeria’s heavy dependence on oil revenue and uncertain outcomes from tax reforms.

They also noted that the 47.1 per cent increase in capital spending to N32.3 trillion shows a commitment to building infrastructure and long-term growth. But this plan is limited by the burden of debt.

Debt servicing is expected to consume N15.8 trillion of the budget. This is about 45 per cent of the target revenue and 23 per cent of total spending.

BudgIT warned that debt servicing could create a tight financial space. This would lock up a large part of government earnings and limit investment in important sectors.

From 2021 to 2025, Nigeria's total public debt increased from N33.1 trillion to N159.3 trillion, which is a 380.9 per cent rise.

BudgIT stated, “Overall, the 2026 budget reflects a government attempting to balance growth ambitions with fiscal realities but hemmed in by structural inefficiencies (weak growth, low productivity, weak currency, low export diversification, a challenging logistical environment, etc.).”

They concluded, “The numbers point to an unambiguous conclusion: Nigeria’s challenge is not just revenue generation, but revenue realism, expenditure discipline, sound debt management and institutional credibility.”