Nigeria’s newly approved 2026–2028 Medium-Term Expenditure Framework has sparked a wave of concern among economists, who warn that the Federal Government’s plan to run an unprecedented N20.10trn deficit in 2026 could drive the nation deeper into fiscal turmoil and ignite a full-scale debt crisis.
The alarm follows the Federal Executive Council’s approval of a proposed N54.43trn spending plan for 2026, with debt servicing projected to gulp N15.91trn - roughly 30 per cent of the entire budget. Analysts stress that the planned deficit overshoots the total size of the 2022 national budget by nearly N3trn, calling it one of the country’s most aggressive borrowing pushes in decades.
Speaking after Wednesday’s FEC meeting, Minister of Budget and Economic Planning, Atiku Bagudu, said the framework was built on expected revenue of N50.74trn, a crude oil benchmark of $64.85 per barrel and an exchange rate assumption of N1,512/$1. He noted that the document would be forwarded to the National Assembly on Monday.
According to Bagudu, the Federal Government projects its share of the revenue at N34.33trn, a drop of 16 per cent from the 2025 estimate. Major components of the proposed spending include N3trn in statutory transfers, N15.27trn for recurrent obligations and N15.91trn to service existing debts. He also revealed that the government is working with two oil output figures: a 2.06mbpd industry projection and a more cautious 1.8mbpd benchmark for budgeting.
But economic experts say the numbers paint a troubling picture.
With expenditure fixed at N54.43trn and revenue at N34.33trn, the government is preparing to run a deficit more than double the N9.22trn recorded in 2025. They warn that debt servicing—projected to reach N15.91trn in 2026—has ballooned far beyond sustainable levels, quadrupling the N3.98trn spent in 2022.
Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, cautioned that Nigeria’s fiscal path is becoming increasingly unsustainable.
“We need to worry about debt sustainability,” Yusuf told Punch. “This level of deficit threatens the fragile macroeconomic stability we’ve begun to see. It could worsen inflation, put pressure on the exchange rate and squeeze out productive investment.”
He urged the government to focus on boosting revenue rather than expanding deficits, stressing that continued borrowing risks triggering a severe economic backlash.
Similarly, Professor Sheriffdeen Tella of Olabisi Onabanjo University questioned the logic of drafting the 2026 budget when the 2025 budget is only just being implemented.
He described the proposed N20trn deficit as “arbitrary,” insisting that the government’s budgeting process has become distorted.
“The 2026 budget should be informed by the performance of the 2025 budget. Yet implementation of 2025 only started in December,” he said.
Tella warned that Nigeria risks running overlapping budgets
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