By. Musa Ibrahim
The Federal Executive Council (FEC) has approved the 2026 – 2028 Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP), setting the stage for Nigeria’s budget planning over the next three years.
The framework includes a conservative oil price benchmark of $64.85 per barrel and a budget exchange rate of N1,512 to the dollar for 2026.
Briefing State House correspondents after last Wednesday’s council meeting in Abuja, Sen. Atiku Bagudu, Honourable Minister of Budget and Economic Planning, said that the MTEF was developed with inputs from government agencies, the private sector, civil society, and development partners. The framework is scheduled to be transmitted to the National Assembly by Monday, December 8.
Sen. Bagudu explained that the plan incorporates two oil production targets: an ambitious 2.06 million barrels per day (mbpd) aimed at production management and a lower benchmark of 1.8 mbpd for budgetary purposes. He noted that the oil price benchmark is deliberately set below typical market realisations as a precautionary measure.
“The target oil production is 2.06 mbpd, which the oil industry is tasked to achieve. However, to avoid revenue shortfalls, we use a benchmark of 1.8 million barrels per day for budget calculations,” he said.
The 2026 macroeconomic assumptions include a growth projection of 4.68 percent and a federal revenue envelope of about N34.33 trillion, which includes N4.98 trillion from government-owned enterprises. The total gross federation revenue is estimated at N50.74 trillion, with allocations to the federal, state, and local governments of N22.60 trillion, N16.30 trillion, and N11.85 trillion respectively.
Major spending heads outlined in the framework include statutory transfers of roughly N3 trillion, debt service of N15.91 trillion, and non-debt recurrent expenditure, covering personnel and pensions, of about N15.27 trillion. The projected deficit stands at N20.10 trillion, representing 3.61 percent of estimated gross domestic product (GDP), giving an overall federal spending envelope of approximately N54.43 trillion.
Sen. Bagudu highlighted that the framework also reflects lessons from the 2025 budget implementation, integrating stakeholder inputs across fiscal parameters, macro assumptions, and risk assessments.
The Honourable Minister further noted that President Bola Tinubu has secured approval from the National Economic Council (NEC) for tighter fiscal and monetary coordination, particularly to enhance security spending, including the rehabilitation of security training institutions. The framework also emphasises curbing revenue losses in the oil, gas, and critical mineral sectors and prioritises transformational infrastructure investments under the Renewed Hope initiative.
“The MTEF/FSP serves as a statutory three-year guide, outlining oil production and price benchmarks, revenue targets, deficit limits, and the spending mix that will underpin the 2026 Appropriation Bill,” Sen. Bagudu said.
Analysts view the framework as a cautious but strategic approach to fiscal planning, balancing growth ambitions with realistic revenue assumptions and prioritising infrastructure, security, and revenue protection as central pillars of the government’s medium-term economic agenda.
