Federal Executive Council Approves N1,512/$ Rate For 2026–2028 Medium Term Expenditure Framework

The Federal Executive Council (FEC) has approved the 2026–2028 Medium-Term Expenditure Framework (MTEF), adopting new fiscal assumptions, macroeconomic targets and revenue projections that will shape the 2026 federal budget.

The approval followed detailed presentations by the Ministry of Budget and Economic Planning and the Budget Office of the Federation during the meeting chaired by President Bola Ahmed Tinubu.
Speaking after the meeting, Minister of Budget and National Planning, Senator Atiku Bagudu, stated that the MTEF was developed through extensive technical work by the economic management team, with input from MDAs, the organised private sector, civil society, and development partners, to ensure that the fiscal strategy reflects national realities and stakeholder expectations.

Bagudu explained that the framework introduces a major innovation by distinguishing between target oil production and benchmark oil production.
For 2026, the government has set a target oil production of 2.06 million barrels per day, which the industry is expected to strive toward. A more conservative benchmark production of 1.84 million barrels per day will be used for budget planning to avoid revenue volatility.

The Council also adopted a benchmark oil price of $64.85 per barrel, which is lower than Nigeria’s average premium crude price but was chosen “out of an abundance of caution,” according to the minister.

For the 2026 fiscal year, the government is projecting an exchange rate of N1,512 to the dollar, reflecting typical election-year pressures on the currency. Inflation is projected to average 18 per cent in 2026.

Based on these assumptions, the total revenue accruing to the Federation in 2026 is estimated at N50.74 trillion, to be shared among the three tiers of government.

From this projection, the Federal Government is expected to receive N22.6 trillion, the states N16.3 trillion, and the local governments N11.85 trillion.

When revenues from all federal sources are consolidated, including N4.98 trillion from government-owned enterprises, total federal government revenue for 2026 is projected at N34.33 trillion—representing a decline of N6.55 trillion, or 16%, compared to the 2025 budget estimate.

Bagudu added that statutory transfers are projected at about N3 trillion, debt service at N10.91 trillion, and non-debt recurrent expenditure—including personnel and overheads—at N15.27 trillion. The fiscal deficit for 2026 is estimated at N20.1 trillion, equivalent to 3.61 per cent of GDP.

The MTEF document further shows that nominal GDP is projected to be N690 trillion or more in 2026, rising to N890.6 trillion by 2028. Non-oil GDP is forecast to increase from N550.7 trillion in 2026 to N871.3 trillion in 2028, while oil GDP is expected to expand from N557.4 trillion to N893.5 trillion within the same period. GDP growth is projected at 4.6 per cent in 2026.

Bagudu said the President believes that with macroeconomic stability now taking root, sustaining reforms and implementing the MTEF faithfully will place Nigeria on a stronger growth path over the next three years.

During his briefing, the minister of finance and coordinating minister of the economy, Wale Edun, confirmed that the MTEF was the main agenda for the day, but noted that FEC also approved two additional financing requests.

The first is a $100 million African Development Bank loan under the Nigeria Youth Investment Fund to support entrepreneurs aged 18 to 35 across micro, small and medium-scale enterprises.

The second is a $50 million Islamic Development Bank financing for an integrated agricultural development project in Yobe State.

Edun said President Tinubu commended the commitment of his cabinet to the Renewed Hope Agenda and noted that recent economic data showed continued resilience, with GDP growing by 3.89 per cent in the third quarter of 2025. Inflation, he said, had begun to ease, while agriculture and industry recorded strong performances.

Despite this progress, the President observed that current growth remains below his seven per cent annual target, which he considers essential for lifting millions out of poverty.

He therefore directed Ministries, Departments and Agencies (MDAs) to prioritise capital expenditure on growth-enhancing and job-creating projects, noting that the economic management team will streamline these priorities for his final approval.