2026 Budget: Federal Gov’t Can Raise $50bn Revenue From Sale Of JV Assets – Economist

The chief executive of CFG Advisory, Tilewa Adebajo, has urged the federal government to sell off part of its stake in its Joint Venture (JV) assets to raise to $50 billion in revenue to finance the 2026 budget, warning that Nigeria’s current debt trajectory is unsustainable.

This is as he projected that economic growth could exceed five per cent by the end of the year if urgent fiscal and structural reforms are implemented.

Speaking at the Finance Correspondents Association of Nigeria (FICAN) 2026 Economic Outlook, Adebajo said Nigeria’s debt profile, estimated at over $100 billion, poses a serious risk to macroeconomic stability.

He noted that the proposed 2026 budget provision of N15.52 trillion for debt service alone exceeds the combined allocations to security, defence, education and health, which stand at N14.97 trillion.

“This is clearly unsustainable. What is most worrying is that virtually all the gains from the removal of fuel subsidies are now being channelled into debt service. The 2026 budget needs to be urgently revised downwards if it is to be realistically implemented,” he said.

Adebajo warned that excessive fiscal spending, a massive deficit and the failure of social intervention programmes have left Nigerian households and businesses under severe strain, with the economy grappling with stagflation.

According to him, the reform agenda risks losing public support if its human impact is not urgently addressed.

“Nigerian households and firms are despondent. This is the time to restore the social intervention programmes and give the reforms a human face, otherwise the economy will continue to struggle despite the tough decisions that have been taken.”

Adebajo stressed the need for the Federal Government to urgently reduce its ownership in key energy assets, recommending a sell-down to at least 49 per cent of its interest in the 74 licensed concession assets.

He said this could raise as much as $50 billion to improve government revenues while also restructuring and recapitalising the balance sheet of the Nigerian National Petroleum Company Limited (NNPC).

“The government needs to sell down part of these assets and also consolidate all NNPC oil forward contracts into a structured debt instrument.

This will make them easier to manage, improve transparency and accountability, and secure better financing rates.”

He added that with these measures in place, Nigeria could begin to reverse the sharp decline in oil and gas investment, which has fallen from about $22 billion in 2009 and 2014 to less than $3 billion in 2024.

According to him, renewed investment is critical to ramping up production to 2.5 million barrels per day to ensure revenue sustainability, boost foreign exchange availability and ease pressure on the naira.

On monetary policy, Adebajo called on the Central Bank of Nigeria (CBN) to consider cutting interest rates to stimulate growth, expressing confidence that inflation could moderate significantly in the near term.

“Official inflation should reach single digits by the end of the second quarter” he said adding that “government must articulate and implement deliberate disinflation and growth policies, targeting between eight and 10 per cent GDP growth to support productivity, employment, exchange rate stability and investment.”

The CFG Advisory chief executive also projected Nigeria’s GDP growth at about five per cent, with single-digit inflation, a 20 per cent Monetary Policy Rate and the naira trading between N1,400 and N1,500 to the dollar.

He further warned that weak fiscal discipline remains the biggest threat to reform success, citing a cumulative three-year budget deficit exceeding N50 trillion and a 2026 fiscal deficit estimated at N23.85 trillion.

“The most alarming signal is that debt service of about N15.2 trillion in the 2026 budget is higher than what we plan to spend on defence, security, education and health combined. That is a red flag that demands urgent attention.”