2026 Budget Is Ambitious, Unrealistic — BudgIT

Civic technology organisation, BudgIT, has described the Federal Government’s 2026 budget as overly ambitious, unrealistic and largely unfeasible under prevailing economic conditions, warning that the fiscal plan could deepen Nigeria’s fiscal vulnerabilities if urgent reforms are not undertaken.

In its analysis of the approved budget, BudgIT noted that while the government has projected total expenditure of N68.32 trillion for the fiscal year, expected revenue stands at only N36.87 trillion, leaving a fiscal deficit of N31.45 trillion.

The organisation said the deficit, equivalent to 6.41 per cent of the nation’s Gross Domestic Product (GDP), exceeds the three per cent threshold stipulated under the Fiscal Responsibility Act, raising concerns about the sustainability of the country’s public finances.

According to BudgIT, the government can only finance about 53.9 per cent of the budget from projected revenues, while the remaining 46.1 per cent would depend on borrowings and loans.

The group stated that the development points to a structural fiscal imbalance that has become entrenched in Nigeria’s budgeting framework despite repeated warnings from stakeholders and fiscal policy experts.

BudgIT further observed that weak revenue performance and declining public trust in governance continue to undermine effective budget implementation, stressing that transparency in budget execution remains critical.

It noted that approved budgets in Nigeria often fail to translate into actual performance due to opaque fund releases and inadequate disclosure of execution reports.

The organisation acknowledged that the budget reflects an expansionary fiscal posture, with capital expenditure estimated at N32.28 trillion, representing 47.13 per cent of total spending and signalling government’s commitment to infrastructure development and economic growth.

However, it warned that mounting debt obligations could significantly constrain the intended impact of such investments.

Debt servicing is projected to gulp N15.8 trillion, accounting for about 23 per cent of total expenditure and nearly 45 per cent of anticipated revenue.

BudgIT said the situation leaves limited fiscal space for investments in critical sectors and social services.

The organisation also faulted sectoral allocations in the budget, arguing that spending priorities remain misaligned with Nigeria’s development needs.

While security received N6.98 trillion, representing 10.21 per cent of the budget, BudgIT said allocations to health and education remain grossly inadequate.

According to the report, health accounts for only 5.2 per cent of the budget, significantly below the 15 per cent target contained in the Abuja Declaration, while education received about 4 per cent, falling short of international benchmarks.

The group warned that the continued underfunding of the sectors has contributed to a fragile healthcare system heavily dependent on out-of-pocket spending and an education sector grappling with more than 18 million out-of-school children.

Speaking on the findings, BudgIT’s Head of Research and Policy Advisory, Engr. Adejoke Akinbode, said the budget reflects a government seeking to balance growth aspirations with fiscal realities but constrained by deep-rooted structural challenges.

“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.

“Without addressing these foundational issues, the current trajectory risks exacerbating fiscal vulnerability, limiting economic growth and worsening social outcomes,” Akinbode stated.

Akinbode further expressed concerns that the country’s proximity to an election cycle could influence spending decisions. “The country is approaching an election year, and there are concerns that the budget may bear characteristics of a politically motivated, pre-election spending framework designed to maximise short-term visibility rather than long-term national value.”

BudgIT called on the Federal Government to enforce zero tolerance for extra-budgetary spending and off-book expenditures, while urging the executive to adopt a strict prioritisation framework that channels scarce public resources to high-impact projects capable of stimulating productivity, improving service delivery and supporting sustainable economic growth.