Step by step breakdown of the 2026 budget

410

 

Here’s a clear, step-by-step breakdown of Nigeria’s 2026 federal government budget as presented by the President to the National Assembly including key numbers, assumptions, and sectoral allocations:

Budget Name: “Budget of Consolidation, Renewed Resilience and Shared Prosperity”. Emphasizing fiscal discipline and economic stability. 

The total proposed 2026 budget of ₦58.18 trillion was presented by President Tinubu to the National Assembly as the 2026 Appropriation Bill. Some reports mentioned  an aggregate envelope of ₦58.47 trillion from Federal Executive Council (FEC) approvals, which may include different classifications or adjustments before final legislative consideration. But the official  figure in the President’s speech  is ₦58.18 trillion.

 Fiscal Framework

1. a) Revenue and Expenditure

Total projected revenue (government receipts): ₦34.33 trillion.

Total expenditure: ₦58.18 trillion.

1. b) Deficit

Budget deficit: ₦23.85 trillion (≈ 4.28 % of GDP).

1. c) Assumptions underpinning the budget

Oil price benchmark: US$64.85 per barrel.

Oil production: 1.84 million barrels per day.

Exchange rate assumption: ₦1,400 per US$1 for budget planning.

Major Spending Categories

The budget splits spending into three main components:

1. Capital Expenditure (Investment in projects)

Allocation: ₦26.08 trillion.

This covers infrastructure, new projects, completion of ongoing works and investments in economic and social sectors.

2. Recurrent (Non-Debt) Expenditure

Personnel costs, overheads, routine government running costs: ₦15.25 trillion.

3. Debt Servicing

Interest and principal payments: ₦15.52 trillion.

Sectoral Allocations (Key Priorities)

In the  presentation,  the President highlighted priority sectors and major allocations as follows:

Defence & Security = ₦5.41 trillion

Enhancing national security and counter-terrorism efforts.

Infrastructure =  ₦3.56 trillion

Roads, bridges, power, logistics and economic infrastructure.

Education = ₦3.52 trillion

Schooling, skills development, student loans and capacity building.

Health = ₦2.48 trillion

Healthcare services, facilities and public health interventions.

 

Strategic Focus & Policy Objectives

The President  outlined several overarching goals of the 2026 budget:

• Fiscal Discipline

Ending overlapping budgets and multiple fiscal cycles.

Tighter execution and monitoring of releases across MDAs (Ministries, Departments & Agencies).

• Revenue Reforms

Stronger tax administration and implementation of new tax laws to broaden the revenue base.

• Socio-Economic Priorities

Strengthening human capital (education, health) while protecting the poor and vulnerable.

Improving the business and investment climate.

• Budget Execution Instructions

Ministries, Departments and Agencies (MDAs) were instructed to complete ongoing capital projects with rollover directives (70 % of 2025 allocations carried forward into 2026 for continuity).

Strict adherence to timelines and revenue performance targets was emphasised to avoid waste and inefficiencies.

 

How does this budget benefit the Micro, Small and Medium Enterprises.

The  budget includes several measures and initiatives that are expected to benefit Micro, Small and Medium Enterprises (MSMEs),  directly or indirectly by improving access to finance, enhancing business environments, and linking public spending to grassroots economic growth.

1. Dedicated Funding & Investment Support

Youth Investment Fund ($100 million)

The Federal Executive Council (FEC) approved a US$100 million Youth Investment Fund aimed at supporting entrepreneurs aged 18–35, including MSMEs.

This fund is designed to provide equity, debt, grants and other forms of financial support to grassroots business owners. According to ThisDayLive.

2.Access to Finance and Credit Expansion

World Bank FINCLUDE Program (~$500 million)

While not a direct line item inside the federal budget, the government is partnering with the World Bank on a $500 million inclusive finance initiative (FINCLUDE).

This is meant to expand access to finance for MSMEs by enhancing credit availability, strengthening microfinance banks, and offering credit guarantees so lenders can serve previously underserved small businesses.

3. SMEDAN’s Expanded Support & Single-Digit Loans

SMEDAN Funding Boost (~N12 billion and formalisation push)

The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) plans to facilitate N12 billion in affordable funding for small enterprises in 2026.

A core focus is single-digit interest rate financing and capacity building to lower the cost of doing business.

4. Continued Federal MSME Funding Platforms

Intervention Funds (Legacy & Ongoing)

The federal government already has intervention funds  like the N200 billion scheme that supports MSMEs and manufacturers which are being implemented into 2026.

Tax Reforms

New tax laws are being implemented around the 2026 cycle, which the government says are intended to simplify and make the tax environment more business-friendly. Though implementation details and impacts are still emerging.