Fresh Borrowings Loom as 2026 Budget Projects N25.27 Trillion Deficit

Nigeria is set to continue borrowing to finance its expanding budget deficit, as the Senate disclosed that the proposed 2026 Federal Budget carries a shortfall of N25.27 trillion, raising fresh concerns over the country’s rising debt burden and weak revenue base.

At the same time, lawmakers and fiscal experts warned that poor revenue mobilisation and persistent borrowing could further strain public finances if not carefully managed. In response, the Senate pledged tighter scrutiny of government spending, particularly service-wide votes, and vowed that no federal budget would be extended beyond the end of the fiscal year.

Chairman of the Senate Committee on Appropriations, Senator Solomon Adeola, disclosed the figures yesterday during the public hearing on the 2026 Appropriation Bill at the National Assembly in Abuja. According to him, the budget proposes total expenditure of N58.47 trillion against projected revenue of N33.19 trillion, leaving a deficit of N25.27 trillion.

Adeola revealed that debt servicing alone is expected to gulp N15.90 trillion in 2026, underscoring the pressure on government finances. He said continued borrowing had become inevitable due to unpredictable revenue inflows and Nigeria’s vast development needs.

“The issue is not whether we borrow, but how responsibly we manage these deficits,” Adeola said, adding that the National Assembly would no longer tolerate weak budget implementation or the rollover of unexecuted budgets.

He stressed that future budgets would not be extended beyond December 31, noting that such extensions encourage inefficiency, abandoned projects and fiscal indiscipline. Adeola also warned that no Ministry, Department or Agency (MDA) would benefit from service-wide votes without strict accountability, as all expenditure items would henceforth be subjected to rigorous oversight.

The senator said borrowing plans would prioritise options that minimise pressure on the private sector, including external loans, public-private partnerships, asset optimisation, privatisation and Eurobond issuances. He also identified the electricity sector as a major drain on public funds, calling for urgent and comprehensive reforms, including unbundling.

Meanwhile, concerns over poor budget performance resurfaced as the Minister of Health, Prof. Mohammed Ali Pate, revealed that the Federal Ministry of Health received only N36 million out of the N218 billion appropriated for its 2025 capital expenditure.

Pate disclosed this yesterday while defending the ministry’s 2026 budget proposal before the House of Representatives Committee on Healthcare Services. He said the meagre release made it impossible for the ministry to execute its capital projects for the year.

Although the ministry’s personnel costs were fully released and utilised, Pate explained that capital funding suffered severe constraints due to the bottom-up cash planning system operated by the Office of the Accountant-General of the Federation. He added that delays in Nigeria’s counterpart funding also prevented access to certain donor-supported capital projects.

According to the minister, the challenges stalled the implementation of the 2025 capital budget, despite the sector’s alignment with national development frameworks such as Vision 20:2020, the Medium-Term National Development Plan 2021–2025 and the National Strategic Health Development Plan II.

He said the 2026 budget proposal was prepared in line with the 2026–2028 Medium-Term Expenditure Framework and Fiscal Strategy Paper and processed through the Government Integrated Financial Management Information System to ensure needs-based allocation.

Chairman of the House Committee on Healthcare Services, Mr Amos Magaji, directed the ministry to submit detailed records of donor funds received and how they were utilised, as lawmakers intensified oversight of public spending amid growing fiscal pressures.