The Federal Government has announced plans to roll outstanding projects and expenditure obligations under the 2026 budget into the 2027 fiscal year in a bid to end the simultaneous implementation of multiple national budgets.
The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, announced the proposed change on Thursday in Abuja at the launch of the October 2026 edition of the World Bank’s Nigeria Development Update.
He said the government was working with the Ministry of Budget and Economic Planning and the Budget Office of the Federation to establish a more realistic budgeting system from 2027, addressing persistent problems with revenue forecasts and delayed capital projects.
“Whatever is left of 2026, we’re transferring into 2027, not running two budgets,” the minister said. “We acknowledge that we can do budget better. We shouldn’t be running multiple budgets at the same time. We shouldn’t have projections for revenue where the outcome is 40 per cent or 60 per cent. We acknowledge that.”
The announcement comes after the Senate and House of Representatives approved another extension of the 2025 capital budget’s implementation period to December 31, 2026. The decision gives Ministries, Departments and Agencies additional time to complete projects provided for under the 2025 Appropriation Act, marking the fourth extension of the capital budget.
Oyedele acknowledged that repeated extensions of capital budgets and unrealistic revenue projections had undermined the country’s budget preparation and implementation processes.
He explained that the government intended to settle outstanding obligations from the 2024 budget and address commitments under the 2025 and 2026 budgets before moving to a more streamlined fiscal framework.
According to him, the reforms would tackle the accumulation of unpaid expenditure commitments across fiscal years, which has complicated budget execution and weakened the credibility of government spending plans.
The minister added that future revenue and expenditure estimates would reflect actual fiscal performance rather than assumptions carried over from previous budgets.
He assured Nigerians that the changes would be reflected in the preparation and execution of the next fiscal plan.
“What I’m saying to the Nigerian people is that you will see the difference from next year,” he stated.
On the proposed presentation of the 2027 Appropriation Bill, Oyedele said the government planned to submit it to the National Assembly before the new fiscal year begins, although he could not guarantee the timing of legislative consideration.
He also outlined the administration’s broader fiscal priorities, including human development, infrastructure expansion and policies to encourage private investment.
Oyedele said the ongoing tax reforms were intended to expand economic activity and increase the number of businesses and individuals contributing to government revenue rather than raise tax rates on existing taxpayers.
“We need more and bigger taxpayers, not more new or higher taxes,” he said.
He argued that faster economic growth would strengthen public revenue while generating employment and improving incomes.
Although he maintained that Nigeria’s economic reforms had improved macroeconomic stability, the minister acknowledged that households had yet to experience the full benefits.
“Economic stability is not the destination for us. It’s the foundation,” he said.
Oyedele expressed optimism that Nigeria’s economic growth in 2026 would surpass the World Bank’s revised forecast of 4.3 per cent, stressing that the country must focus on creating better-paying jobs.
He also said the Federal Government would improve coordination with state governments and monetary authorities to tackle inflation and enhance public service delivery.
World Bank seeks stronger budget controls
Earlier, the World Bank Country Director for Nigeria, Mathew Verghis, called for improvements in budget credibility, public investment management and expenditure controls at both federal and state levels.
Verghis said recent macroeconomic reforms had significantly increased revenues available to the two tiers of government, but stressed that the additional resources must produce better development outcomes.
“Priorities in this regard will include strengthening budget credibility, improving cash and commitment controls, strengthening public investment management,” he said.
He noted that states had received higher federation allocations following the removal of petrol subsidies, foreign exchange reforms and improvements in tax administration.
However, he said the increase in available funds had not resulted in corresponding improvements across all sectors.
According to Verghis, many states had expanded transport infrastructure spending and reduced domestic debt, while increases in allocations to education, healthcare and social protection had been comparatively slower.
He also observed that nearly all states now published annual budgets, quarterly implementation reports, audited financial statements and debt information, describing the disclosures as progress in fiscal transparency.
The World Bank official urged governments to build on these gains by strengthening spending controls and ensuring that budgetary allocations delivered measurable results.
Presenting the report, the World Bank’s Lead Economist for Nigeria, Fiseha Haile, identified gaps between approved capital budgets and actual expenditure across states as a major concern.
He attributed the discrepancies to weak budget credibility, poor cash management and shortcomings in public investment planning.
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Haile said Nigeria’s consolidated fiscal position improved in the first half of 2026, supported by stronger revenues and increased federation transfers.
He disclosed that the Federal Government’s fiscal deficit fell from five per cent of gross domestic product in the corresponding period of 2025 to four per cent in the first half of 2026.
The combined fiscal surplus of state governments also rose from 0.7 per cent to 0.9 per cent of GDP, he added.
According to the economist, gross federation revenues increased by 69 per cent between 2023 and 2025, while net revenues distributed to the different tiers of government grew by approximately 60 per cent.
Despite the improvement, Haile warned that fiscal pressures could increase in the second half of 2026 as governments accelerate project execution and undertake development and election-related spending.
“Nigeria’s consolidated fiscal position, including both the federal government but also aggregate state fiscal position, has strengthened in the first half of 2026, but spending pressures, I expect, will pick up in the second half due to faster execution of projects, but also election and development-related spending,” he said.
He recommended more credible budgets, stronger public financial management systems and better coordination between federal and state authorities.
Haile also advised state governments to expand their internally generated revenue and reduce their reliance on federal allocations.
CBN calls for coordinated fiscal, monetary policies
Speaking during a panel discussion, the Deputy Governor of the Central Bank of Nigeria in charge of Financial System Stability, Lamido Yuguda, said fiscal and monetary authorities needed to work together to sustain economic stability.
Yuguda noted that inflation remained a major challenge despite improvements in monetary conditions and the foreign exchange market.
He said the CBN would continue to base monetary policy decisions on economic data, liquidity conditions and developments in international financial markets.
“We are data-dependent,” he said, adding that monetary authorities would maintain the discipline required to bring inflation towards single digits.
The deputy governor said stronger foreign exchange reserves and improved market liquidity had boosted confidence in the Nigerian economy.
However, he stressed that challenges relating to food production, insecurity and infrastructure required interventions beyond monetary policy.
Radda highlights social spending, revenue reforms
Katsina State Governor, Dikko Radda, said governments should direct increased revenues towards investments that lower living costs and improve access to essential services.
He argued that infrastructure development and social investment should complement each other rather than compete for limited public funds.
Radda said his administration had prioritised education, healthcare, energy and infrastructure, including the construction of about 170 schools and the development of 268 functional primary healthcare facilities.
He also disclosed that the state had paid more than N50bn in outstanding gratuities over two years while introducing measures to improve revenue collection.
According to the governor, technology, the Treasury Single Account and digital land administration had strengthened Katsina’s internally generated revenue.
He said the reforms were intended to reduce the state’s dependence on federal allocations while sustaining expenditure on essential services and capital projects.
NESG seeks shift from stability to job creation
The Chief Executive Officer of the Nigerian Economic Summit Group, Tayo Aduloju, said Nigeria must move beyond macroeconomic stabilisation and ensure that economic reforms translate into employment, higher productivity and improved household incomes.
While acknowledging progress from the reforms, Aduloju called for stronger alignment between fiscal and monetary policies and private sector investment.
He said public infrastructure spending should focus on projects that link production centres to markets, improve logistics and attract private capital.
The NESG chief warned that government budgets alone could not meet the country’s extensive infrastructure needs.
“Nigeria needs at scale $2.3tn to upgrade its national and subnational infrastructure to world-class,” he said.
He urged federal and state governments to develop commercially viable projects that could attract private investors instead of relying solely on public funding.
Aduloju further estimated that Nigeria would need to generate about four million jobs annually between now and 2030 to achieve substantial poverty reduction.
“Are we creating jobs? Yes. Are we creating the jobs required to lift more people out of poverty at scale? No, not yet,” he said.
He identified high borrowing costs, insecurity, expensive energy and inadequate transport infrastructure as major constraints on private sector expansion.
The NESG chief called for consistent policies and stronger cooperation among governments, financial institutions and businesses to ensure that increased public revenues translate into productive investments and broader economic benefits.