• Pegs exchange rate at N1,512/$, oil benchmark at $64.85
By Egena Sunday Ode
The Federal Executive Council (FEC) on Wednesday approved the 2026–2028 Medium-Term Expenditure Framework (MTEF), with new fiscal assumptions, macroeconomic targets and revenue projections to shape the 2026 federal budget.
The approval was given after detailed presentations by the Ministry of Budget and Economic Planning and the Budget Office of the Federation during the FEC meeting presided over by President Bola Ahmed Tinubu.
Briefing newsmen on the outcomes of the meeting, Minister of Budget and National Planning, Senator Atiku Bagudu, said the MTEF was developed through extensive technical work by the economic management team, with inputs from MDAs, the organised private sector, civil society and development partners to ensure the fiscal strategy reflects national realities and stakeholder expectations.
According to him, the framework introduces a major innovation by distinguishing between target oil production and benchmark oil production.
He said, for 2026, the government has set a target oil production of 2.06 million barrels per day, which the industry is expected to strive toward, while a more conservative benchmark production of 1.84 million barrels per day will be used for budget planning to avoid revenue volatility.
According to the Minister also, the Council adopted a benchmark oil price of $64.85 per barrel, lower than Nigeria’s average premium crude price but chosen “out of an abundance of caution.”
For the 2026 fiscal year, the government is projecting an exchange rate of N1,512 to the dollar, reflecting typical election-year pressures on the currency. Inflation is projected to average 18% in 2026.
The total revenue accruing to the Federation in 2026, based in these assumptions, is estimated at N50.74 trillion, to be shared among the three tiers of government.
From this projection, the Federal Government is expected to receive N22.6 trillion, states N16.3 trillion, and local governments N11.85 trillion.
Bagudu explained that when revenues from all federal sources are consolidated, including N4.98 trillion from government-owned enterprises, total Federal Government revenue for 2026 is projected at N34.33 trillion—representing a N6.55 trillion or 16% decline compared to the 2025 budget estimate.
Statutory transfers are projected at about N3 trillion, debt service at N10.91 trillion, and non-debt recurrent expenditure—including personnel and overheads—at N15.27 trillion. The fiscal deficit for 2026 is estimated at N20.1 trillion, equivalent to 3.61% of GDP, he added.
Further, the MTEF document shows that nominal GDP is projected at N690 trillion+ in 2026, rising to N890.6 trillion by 2028. Non-oil GDP is forecast to increase from N550.7 trillion in 2026 to N871.3 trillion in 2028, while oil GDP is expected to expand from N557.4 trillion to N893.5 trillion within the same period. GDP growth is projected at 4.6% in 2026.
Bagudu said the President believes that with macroeconomic stability now taking root, sustaining reforms and implementing the MTEF faithfully will place Nigeria on a stronger growth path over the next three years.
Also briefing newmen on the devisions reached at the FEC meeting, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, confirmed that the MTEF was the main agenda for the day, but noted that FEC also approved two additional financing requests.
Accorsing to him, the first is a $100 million African Development Bank loan under the Nigeria Youth Investment Fund to support entrepreneurs aged 18 to 35 across micro, small and medium-scale enterprises and the second is a $50 million Islamic Development Bank financing for an integrated agricultural development project in Yobe State.
Edun disclosed that President Tinubu commended the commitment of his cabinet to the Renewed Hope Agenda and noted that recent economic data showed continued resilience, with GDP growing by 3.89% in the third quarter of 2025. Inflation, he said, had begun easing, while agriculture and industry recorded strong performance.
Despite this progress, the President observed that current growth remains below his 7% annual target, which he considers essential for lifting millions out of poverty.
Accordingly, he directed Ministries, Departments and Agencies (MDAs) to prioritise capital expenditure on growth-enhancing and job-creating projects, noting that the economic management team will streamline these priorities for his final approval.
