The Senate has warned that it may cut the federal government’s proposed ₦58.472 trillion 2026 budget if the executive fails to provide realistic revenue projections and firmer guarantees that the ambitious spending plan can actually be funded.
The warning was delivered during a tense interactive session on Thursday, February 19, between the Senate Committee on Appropriations and the federal government’s economic team, where lawmakers openly challenged the assumptions underpinning the record budget proposal.
Chairman of the Senate Committee on Appropriations, Senator Solomon Adeola, questioned the credibility of oil revenue projections that have consistently fallen short in previous years.
“How do we explain this level of underperformance?” Adeola asked, citing instances where actual oil revenue performance came in at just 18 per cent in one fiscal year and 36.5 per cent in another.
“Do we reduce this N58.472 trillion budget or proceed and make adjustments? If we are not reducing it, then you are telling Nigerians you will meet these targets,” he said.
The senator warned that with Nigeria’s debt stock hovering around ₦152 trillion and debt servicing consuming a significant share of revenue, the legislature would not rubber-stamp projections that could worsen the country’s fiscal position.
He suggested that strategic asset sales could help reduce the debt portfolio and cut future borrowing costs.
Minister of Finance and Coordinating Minister of the Economy, Wale Edun, defended the oil production benchmark of 1.84 million barrels per day, describing it as a deliberate stretch target.
“It is a stretch target so that authorities do not settle for lower output,” Edun said.
“But as long as we do not spend what we do not have, we are within safe limits,” he added.
Edun said security spending had been prioritised in the 2026 proposal, revealing that emergency funding had already been released for critical military procurements.
“We all agree that security is to be prioritised. Emergency funding has been given. Critical foreign payments for security equipment have been made, at least twice this year, including as recently as on Thursday,” he said.
The minister argued that Nigeria’s debt challenge was less about the debt-to-GDP ratio and more about the high cost of borrowing for developing countries in international markets.
He said Nigeria was currently chairing a technical group meeting of the G24, where debt sustainability and high interest rates remained dominant concerns.
Edun pointed to signs of economic recovery, including growth of approximately four per cent, easing inflation, improved foreign reserves, exchange rate stability, and renewed investor confidence, citing a reported $20 billion commitment by Shell.
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Chairman of the Nigeria Revenue Service, Dr Zacch Adedeji, appeared to side partly with lawmakers, cautioning against inflated revenue assumptions.
“Budget efficiency is not in the size of the budget; it is in what you can implement. If we think we have 10 naira and we plan with 100 naira in mind, we will create problems for ourselves. The starting point must be realistic assumptions,” Adedeji said.
He explained that under the Petroleum Industry Act, government revenue from oil now comes largely from taxes and royalties rather than gross crude sales, with high production costs significantly reducing what flows into the federation account.
He disclosed that projections indicated only about 47 per cent of total oil company output translated into government revenue under current arrangements.
Lawmakers also raised concerns about poor capital budget implementation in 2024 and 2025, which they said recorded minimal releases.
Minister of State for Finance, Dr Doris Nkiruka Uzoka-Anite, assured the committee that outstanding capital components of both budgets would be fully implemented before March 31, 2026.
“The financial management system is back online. We are ready to start, but MDAs must complete their documentation requirements,” she said.
The session later moved behind closed doors for nearly two hours, with Minister of Budget and Economic Planning Senator Atiku Bagudu and Accountant-General of the Federation Shamsedeen Babatunde Ogunjimi joining the discussions.
By the end of deliberations, the Senate signalled that unless the executive revised its assumptions and provided firmer revenue guarantees, the National Assembly would be compelled to trim the budget in the interest of fiscal realism.
In a separate development during budget defence proceedings, the National Assembly proposed a ₦1.5 trillion take-off grant for the Federal Ministry of Art, Culture, Tourism and the Creative Economy to reposition the sector as a driver of economic diversification.
Minister Hannatu Musa Musawa projected that the sector could contribute $100 billion to Nigeria’s GDP and generate over 2.5 million jobs by 2030.
Chairman of the Joint Committee on Culture, Art and Creative Economy, Senator Mohammed Onawo, challenged the ministry to determine how much funding it would need to become self-sustaining.
“If the federal government decides to take you off the national budget, how much take-off grant would you need to become independent? You cannot start with nothing,” Onawo said.
The committee proposed the ₦1.5 trillion funding package, saying the creative and tourism sectors possessed enormous untapped potential capable of transforming the country’s economic landscape.