‘2026-2028 expenditure framework, shift toward fiscal realism’
The Centre for the Promotion of Private Enterprises (CPPE) in its policy brief on the recently unveiled 2026-2028 Medium Term Expenditure Framework (MTEF) described it as a shift to a more realistic fiscal projection. The MTEF which outlines the government’s revenue projections, expenditure plans, and fiscal targets, was approved last week by the Federal Executive […]
Centre for the Promotion of Private Enterprise (CPPE)
The Centre for the Promotion of Private Enterprises (CPPE) in its policy brief on the recently unveiled 2026-2028 Medium Term Expenditure Framework (MTEF) described it as a shift to a more realistic fiscal projection.
The MTEF which outlines the government’s revenue projections, expenditure plans, and fiscal targets, was approved last week by the Federal Executive Council (FEC) as a prelude to the 2026 budget presentation which has faced delay from the executive.
According to the Fiscal Responsibility Act of 2007, the MTEF must be prepared by the executive, presented to the National Assembly for approval at least four months before the fiscal year begins, and must be approved before the annual budget can be developed.
Last week, the federal executive council approved the MTEF, projecting that the federal government expects to generate N34.33 trillion in revenue in 2026 fiscal year.
The Council adopted an oil production target of 2.06 million barrels per day for 2026, while a more conservative 1.8 million barrels per day will be used for budget planning.
An oil benchmark price of $64 per barrel was approved, alongside a projected exchange rate of N1,512 to the dollar, noting that the exchange rate assumption was factored in the fiscal outlook with the 2027 general elections in mind.
It would be recalled that the 2025 budget parameters were anchored on an oil production of 2.2m and $75 per barrel of crude which were never realised.
But Director/CEO of the CPPE, Dr. Muda Yusuf in his policy brief on the MTEF 2026-2028 said the framework signaled “a welcome and deliberate shift toward more conservative, realistic, and credible fiscal planning.”
According to him, the framework “responds to heightened global uncertainties, Nigeria’s domestic fiscal pressures, recurring missed revenue targets, the pre-election dynamics expected in 2026, and the longstanding challenges around oil production and oil-price volatility.”
‘2025 projections damaging’
The CPPE who expressed concern over the delay in the MTEF in violation of the fiscal responsibility act of 2007 noted that the “unrealistic assumptions of the 2025 budget were particularly damaging, contributing to implementation shortfalls and widening credibility gaps.”
“The emerging shift toward more realistic assumptions in the 2026–2028 MTEF is therefore commendable. It represents an important step toward reducing variances between projected and realised outcomes and toward restoring the budget as a credible governance tool rather than a routine, ceremonial annual document,” he stated.
He noted the introduction of dual oil production parameters comprising technical production target of 2.06 mbpd and benchmark (budget) production of 1.80 mbpd, describing it as a major improvement in the budget.
“Using 1.80 mbpd as the revenue basis is significantly more prudent than the 2.06 mbpd used in the 2025 budget, especially given chronic underproduction, vandalism, theft, and operational bottlenecks.
“However, based on historical production trends, the CPPE proposes an even more conservative benchmark of 1.6 mbpd to ensure fiscal resilience.
“The 2026 oil price benchmark of $64.85 per barrel, down from $75 in the 2025 budget, also reflects a more cautious approach. Nonetheless, even this estimate is still somewhat optimistic, given global forecasts…,” he stated.
Yusuf explained that the benchmark exchange rate of N1,540/$ acknowledged the “likely liquidity pressures arising from the 2026 election cycle and broader macroeconomic dynamics.”
According to him, the assumption provides a realistic basis for planning around FX-linked capital projects; contract price variations; imported input costs and broader implementation risks.
He said, “Although a weaker naira increases project costs, it simultaneously boosts naira-denominated revenues. This benchmark, therefore, provides a credible basis for fiscal planning.
“More importantly, the 2026 revenue projection of N34.33 trillion—a 16% reduction from the N36.35 trillion projected for 2025—reflects a more grounded assessment of Nigeria’s revenue conditions despite ongoing tax and administrative reforms. This downward adjustment is a welcome sign of improved fiscal prudence.”
‘Debt sustainability, major concern’
The CPPE further described debt sustainability as a critical concern as the MTEF projects and allocates N15.91 trillion to debt service in 2026, representing 46% of projected revenue.
He added that the level of debt-service commitment significantly limits fiscal space for infrastructure investment, social sector spending, security and stabilisation programmes.
According to the CPPE, Nigeria’s rising debt trajectory underscores the urgent need for a renewed focus on debt sustainability; stronger domestic revenue mobilisation and greater efficiency, cost-effectiveness, and accountability in public expenditure.