Nigeria federal and state fiscal management

Nigeria’s fiscal landscape is undergoing significant shifts as the government attempts to address development needs through expanded budgeting. Minister of Budget and Economic Planning, Senator Abubakar Bagudu, previously noted that the nation’s current fiscal space is insufficient for its large population, calling for a national dialogue on revenue mobilisation to support long-term economic goals.

Following these concerns, President Bola Tinubu signed the 2026 Appropriation Act, the largest in Nigeria’s history, totaling N68.32 trillion ($48.80 billion). The budget allocates N32.2 trillion to capital expenditure, N15.8 trillion to debt service, and N15.4 trillion to recurrent spending.

Analysis of the federal budget indicates a substantial deficit. While official figures did not specify the exact amount, estimates suggest a deficit between N23.85 trillion and N31.45 trillion, which would represent approximately 6.41% of GDP. This projected deficit exceeds the 3% GDP ceiling mandated by the Fiscal Responsibility Act 2007.

Concurrently, fiscal adjustments are occurring at the state level, such as in Taraba State, where a N148 billion supplementary budget proposal is undergoing legislative review to address security and infrastructure needs.