In a decisive move to shield the national economy from international shocks, the Nigerian Senate has revised the foundational parameters of the upcoming fiscal year.
During an extended plenary session on Tuesday, the 16th of December, 2025, lawmakers downgraded the crude oil price benchmark for the 2026 budget from an initial $64.8 to a more conservative $60 per barrel.
This adjustment serves as a strategic buffer for the projected N54.46 trillion expenditure estimate, ensuring the nation’s financial plans remain grounded despite an unpredictable global market.
The legislative shift followed a comprehensive report by the Senate Committee on Finance, led by Senator Sani Musa (APC Niger East). Explaining the necessity of the reduction, Musa noted the change was “made in recognition of the global geopolitical tensions in Europe and the Middle East and the sensitivity of global crude oil prices.” While the immediate outlook for 2026 was cautious, the Senate maintained a trajectory of growth for subsequent years, approving oil price benchmarks of $65 for 2027 and $70 for 2028.
Beyond the oil price, the upper chamber demonstrated strong confidence in the executive’s broader economic trajectory. The Senate sustained the domestic crude oil production targets at 1.84 million barrels per day (mbpd) for 2026, gradually rising to 1.92 mbpd by 2028. This optimism is anchored in ongoing sectoral reforms designed to stabilize and boost national output.
The approved framework also paints a picture of a stabilizing currency and cooling inflation. Lawmakers endorsed exchange rate projections starting at N1,512 to the dollar in 2026 and strengthening to N1,383.18 by 2028. This alignment supports the Central Bank of Nigeria’s efforts to harmonize fiscal and monetary policies. Simultaneously, inflation is expected to see a sharp decline, dropping from a projected 16.5 per cent in 2026 to a single-digit 9 per cent by 2028, a target the committee attributed to “the commitment of monetary authorities to tame inflationary pressures.”
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A significant pillar of the Senate’s new strategy involves aggressive revenue optimization. The report emphasized that the “effective implementation of newly enacted Tax Acts as veritable instruments for economic reform, growth and development” would be essential. To support this, the Senate recommended a National Scanning Policy under the “National Single Window of the Nigeria Revenue Service.” This digital and physical infrastructure is intended to “enhance revenue assurance, improve trade facilitation, reduce leakages, strengthen transparency and bolster national security.”
The total fiscal package for 2026 includes a N54.46 trillion expenditure cap, supported by N34.33 trillion in retained revenue. To cover the remaining gap, the Senate approved N17.88 trillion in new borrowings from both domestic and international sources, while setting aside N15.52 trillion for debt service. Capital expenditure has been prioritized at N20.131 trillion, ensuring that infrastructure remains at the forefront of the administration’s “Renewed Hope” agenda.
Senate President Godswill Akpabio concluded the session by praising the committee for establishing a “veritable platform for presentation of the 2026 budget by President Bola Tinubu before December 31, this year.” He echoed the committee’s sentiment that this framework will serve as a “catalyst for sustainable economic prosperity in Nigeria.”