ABUJA — Nigeria’s Senate has said the federal government will continue borrowing to fund the 2026 budget gap, while also announcing a tougher fiscal-enforcement regime that would end routine budget extensions and force stricter scrutiny of Ministries, Departments and Agencies (MDAs).
At a public hearing on the 2026 Appropriation Bill, Senate Appropriations Committee Chairman Senator Olamilekan Adeola said borrowing remains unavoidable because revenue inflows are unstable and development needs are large. He argued that the core issue is no longer whether to borrow, but how deficits are financed and whether borrowed funds are tied to productive outcomes.
Adeola said the National Assembly would no longer approve prolonged implementation cycles — a long-standing practice that allowed unspent allocations to be rolled over repeatedly. He warned MDAs to prepare for tighter budget defence and possible reallocations where proposals are weak or unjustified.
Lawmakers at the hearing outlined the broad 2026 fiscal picture now before parliament: projected expenditure of about ₦58.47 trillion, expected revenue of ₦33.19 trillion, and a deficit of roughly ₦25.27 trillion, with debt service around ₦15.90 trillion. Those figures reinforce concerns that debt obligations are consuming a large share of fiscal space even as government tries to protect capital spending.
Adeola said the government is trying to limit excessive domestic borrowing to avoid crowding out private-sector credit, while expanding alternatives such as external financing, PPPs, asset optimisation, and privatisation-linked resource mobilisation. That approach broadly aligns with the federal government’s earlier macro-fiscal signals on deficit financing and debt-service management.
At the same hearing, fiscal experts warned that rising deficits could become unsustainable without stronger revenue mobilisation and tougher enforcement of existing fiscal laws, including the Fiscal Responsibility framework. The Accountant-General of the Federation, Shamseldeen Ogunjimi, also criticised weak execution culture, saying Nigeria has historically been stronger at drafting budgets than translating them into measurable results.
The Senate’s dual message is therefore clear: borrowing will continue in the short term, but the political cost of poor implementation is set to rise. Whether this marks a real break from past cycles will depend on three tests over the 2026 fiscal year — disciplined release of funds, transparent monitoring of MDAs, and evidence that debt-financed spending delivers visible public value rather than recurrent rollovers.
