By peterside Rejoice
The Senate on Tuesday approved the 2026–2028 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) submitted by President Bola Ahmed Tinubu, paving the way for the presentation of the 2026 Appropriation Bill to a joint session of the National Assembly.
As part of the approval, the Upper Chamber reviewed key macroeconomic assumptions and reduced the crude oil benchmark price for 2026 to $60 per barrel, down from the $64.85 earlier proposed by the executive. The benchmarks for 2027 and 2028 were, however, fixed at $65 and $70 per barrel respectively.
The Senate explained that the downward adjustment for 2026 was informed by prevailing global uncertainties, including heightened geopolitical tensions in Europe and the Middle East, as well as persistent volatility in the international oil market.
The approval followed the consideration and adoption of the report of the Senate Committee on Finance, chaired by Senator Sani Musa (APC, Niger East), during plenary.
Under the approved framework, the Senate endorsed a N54.46 trillion federal expenditure plan for 2026, aimed at cushioning the Nigerian economy against external shocks and strengthening fiscal resilience.
Oil production was sustained at 1.84 million barrels per day (mbpd) for 2026. Projections were also set at 1.88 mbpd for 2027 and 1.92 mbpd for 2028, with the Senate expressing confidence in ongoing reforms in the oil and gas sector and efforts to stabilise crude output.
On exchange rate assumptions, the framework pegged the rate at N1,512 to the dollar for 2026, N1,432.15/$ for 2027 and N1,383.18/$ for 2028, in line with the Central Bank of Nigeria’s exchange rate management objectives.
Inflation is projected to decline steadily over the medium term, with estimates of 16.5 per cent in 2026, 13 per cent in 2027, and 9 per cent in 2028, reflecting anticipated gains from monetary tightening, fiscal discipline and structural economic reforms.
The Senate also retained real Gross Domestic Product (GDP) growth projections of 4.68 per cent for 2026, 5.96 per cent for 2027, and 7.9 per cent for 2028, citing expected improvements from tax reforms, enhanced revenue mobilisation and broader economic restructuring.
On fiscal operations, the approved framework provides for FGN 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.
Further breakdown of the expenditure framework shows allocations of N1.376 trillion for pensions, gratuities and retirees’ benefits; N20.131 trillion for capital expenditure (exclusive of transfers); N3.152 trillion for statutory transfers; and N388.54 billion for the Sinking Fund. Total recurrent (non-debt) expenditure was approved at N15.265 trillion, while special intervention funds for recurrent and capital spending were fixed at N200 billion and N14 billion respectively.
In a bid to boost revenue generation and strengthen transparency, the Senate endorsed the effective implementation of newly enacted tax reform laws. It also approved the introduction of a National Scanning Policy within the National Single Window of the Nigeria Revenue Service, in collaboration with relevant agencies. The policy is expected to improve revenue assurance, reduce leakages, enhance trade facilitation and bolster national security.
In his concluding remarks, Senator Musa commended members of the Senate and the Committee on Finance for their diligence, expressing optimism that the approved framework would promote sustainable economic growth, fiscal stability and improved service delivery over the medium term.
