By Citizenship News
The Senate on Tuesday revised downward the oil price benchmark for the proposed N54.46 trillion 2026 budget, reducing it from $64.8 to $60 per barrel, while retaining all other projections and parameters contained in the 2026–2028 Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).
The adjustment followed recommendations by the Senate Committee on Finance, as contained in a report presented by its Chairman, Senator Sani Musa (Niger East).
Senator Musa explained the decision saying the reduction was informed by prevailing global geopolitical tensions in Europe and the Middle East, as well as the volatility and sensitivity of international crude oil prices.
The Senate also approved the committee’s recommended adjustments to oil price benchmarks for the outer years, revising the proposed figures for 2027 and 2028 from $64.30 and $65.50 per barrel to $65 and $70 per barrel, respectively.
However, lawmakers sustained domestic crude oil production projections at 1.84 million barrels per day (mbpd) for 2026, 1.88mbpd for 2027 and 1.92mbpd for 2028, expressing confidence in ongoing reforms and measures aimed at stabilising oil output.
On macroeconomic assumptions, the Senate endorsed projected exchange rates of N1,512 to the dollar in 2026, N1,432.15 in 2027 and N1,383.18 in 2028, in line with the Central Bank of Nigeria’s policy direction to stabilise the naira through coordinated fiscal and monetary policies.
Inflation is projected to decline steadily over the medium term, with rates of 16.5 per cent in 2026, 13 per cent in 2027 and 9 per cent in 2028. The committee attributed these projections to the commitment of monetary authorities to rein in inflationary pressures.
Similarly, the Senate retained real GDP growth projections of 4.68 per cent for 2026, 5.96 per cent for 2027 and 7.9 per cent for 2028, citing ongoing economic reforms and anticipated gains from tax reforms expected to take stronger effect from 2026.
A major highlight of the report was the emphasis on effective implementation of newly enacted tax laws as critical tools for economic reform, growth and development. In this regard, the committee recommended the adoption of a National Scanning Policy within the National Single Window of the Nigeria Revenue Service, in collaboration with relevant agencies.
According to the report, the policy would strengthen revenue assurance, enhance trade facilitation, reduce leakages, improve transparency and boost national security.
On fiscal operations, the Senate approved the 2026 Federal Government budget framework with a proposed total expenditure of N54.46 trillion. From this amount, retained revenue is estimated at N34.33 trillion, while new borrowings—both domestic and foreign—are projected at N17.88 trillion. Debt service obligations are estimated at N15.52 trillion.
The framework also allocates N1.376 trillion for pensions, gratuities and retirees’ benefits, with the fiscal deficit pegged at N20.13 trillion.
Capital expenditure, excluding transfers, was maintained at N20.131 trillion, alongside statutory transfers of N3.152 trillion and a Sinking Fund provision of N388.54 billion. Total recurrent (non-debt) expenditure was approved at N15.265 trillion, while special intervention funds for recurrent and capital spending were set at N200 billion and N14 billion, respectively.
In its concluding remarks, the committee expressed appreciation to the Senate and members of the Committee on Finance for their dedication in carrying out what it described as a critical national assignment. It expressed optimism that approval and effective implementation of the recommendations would drive sustainable economic growth and prosperity.
In his remarks, Senate President, Godswill Akpabio commended the committee for what he described as a job well done, noting that the report provides a solid foundation for President Bola Ahmed Tinubu to present the 2026 budget to the National Assembly before December 31 this year.
