(DDM) – The Nigerian Senate has formally approved the 2026–2028 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) submitted by President Bola Tinubu.
This approval clears the way for the President to present the 2026 Appropriation Bill to a joint session of the National Assembly.
The Senate revised the crude oil benchmark for 2026 downward to $60 per barrel, lower than the $64.85 proposed by the executive, while setting benchmarks of $65 and $70 per barrel for 2027 and 2028, respectively.
The adjustment was attributed to heightened geopolitical tensions in Europe and the Middle East, alongside ongoing volatility in global oil markets.
The approval followed deliberations and adoption of the report from the Senate Committee on Finance, chaired by Senator Sani Musa (APC, Niger East), during plenary.
Under the framework, federal expenditure for 2026 is estimated at N54.46 trillion, designed to cushion the economy against external shocks and uncertainties.
The projected exchange rate was pegged at N1,512 to the dollar for 2026, with subsequent estimates of N1,432.15 for 2027 and N1,383.18 for 2028, reflecting the Central Bank of Nigeria’s exchange rate stability policies.
Inflation is projected to gradually decline, with estimates of 16.5 percent in 2026, 13 percent in 2027, and 9 percent in 2028, reflecting the anticipated impact of monetary tightening and structural reforms.
Despite conservative oil price assumptions, the Senate retained crude oil production targets of 1.84 million barrels per day for 2026, 1.88 million barrels per day for 2027, and 1.92 million barrels per day for 2028, citing ongoing sector reforms and stabilization efforts.
Real GDP growth projections were also maintained at 4.68 percent for 2026, 5.96 percent for 2027, and 7.9 percent for 2028, supported by expected gains from tax reforms and broader economic restructuring.
DDM gathered that on fiscal operations, the framework approved federal government retained revenue of N34.33 trillion, new borrowings of N17.88 trillion, and debt service obligations of N15.52 trillion, resulting in a projected fiscal deficit of N20.13 trillion for 2026.
The framework allocates N1.376 trillion for pensions, gratuities, and retirees’ benefits; N20.131 trillion for capital expenditure excluding transfers; statutory transfers of N3.152 trillion; and a Sinking Fund of N388.54 billion.
Total recurrent (non-debt) expenditure was set at N15.265 trillion, while special intervention funds for recurrent and capital spending were fixed at N200 billion and N14 billion, respectively.
The Senate also endorsed the implementation of newly enacted tax laws and approved the introduction of a National Scanning Policy within the National Single Window of the Nigeria Revenue Service.
The policy is intended to strengthen revenue assurance, enhance trade facilitation, reduce leakages, improve transparency, and boost national security.
In his closing remarks, Senator Musa commended lawmakers and the Finance Committee, expressing confidence that the approved MTEF/FSP would promote fiscal stability and sustainable economic growth for the nation.