Nigeria’s Senate has issued a strong warning to the Federal Government over the persistent implementation of multiple budgets within a single fiscal year, describing the practice as fiscally reckless and detrimental to economic planning.
The lawmakers also directed the Federal Inland Revenue Service (FIRS) to significantly raise its 2026 revenue target to ₦35 trillion as part of efforts to strengthen government finances and restore credibility to the budgeting process.
The resolution was reached on Monday during an interactive session between the Senate Committee on Finance and key members of the Federal Government’s economic management team over the 2026–2028 Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).
The meeting came amid mounting concerns over weak revenue performance, widening fiscal deficits, and delayed execution of capital projects across the country.
2026 Revenue Target Under Senate Scrutiny
At the centre of the deliberations was the Federal Government’s admission that it has so far realised only ₦10 trillion out of the projected ₦40 trillion revenue for the 2025 fiscal year, leaving a massive ₦30 trillion shortfall.
Lawmakers said the development raised serious questions about the realism of government projections and the sustainability of current fiscal practices.
Chairman of the Senate Committee on Finance, Senator Sani Musa (Niger East), said the situation had compelled the committee to demand a more ambitious but achievable 2026 revenue target, urging FIRS to raise its projection from ₦31 trillion to at least ₦35 trillion.
According to Musa, improving revenue mobilisation remains the most viable option for addressing Nigeria’s recurring budget execution challenges, especially in the face of rising debt servicing costs and limited fiscal space.
“The continued rollover of capital projects from one budget cycle to another has become systemic. This practice undermines the integrity of our budgeting process and weakens public confidence in government,” Musa said.
Multiple Budgets Undermining Fiscal Discipline
The Senate expressed deep concern over what it described as the normalisation of overlapping budgets, a situation where projects approved for one fiscal year are carried into subsequent years due to poor funding.
Lawmakers warned that the practice distorts planning, weakens accountability, and complicates oversight by the National Assembly.
Minister of Finance and Coordinating Minister of the Economy, Wale Edun, told the committee that while the 2024 budget recorded relatively strong performance, the 2025 budget had been badly hit by revenue constraints.
He explained that the full ₦26 trillion revenue projection for 2024 was realised, enabling better funding of capital projects.
However, Edun disclosed that only a quarter of the ₦40 trillion projected revenue for 2025 had been achieved, forcing the Federal Government to roll over about 70 per cent of capital projects into 2026.
The explanation did little to calm lawmakers, many of whom described the trend as unacceptable.
Senator Danjuma Goje (Gombe Central) said the continued execution of multiple budgets was a sign of structural weakness in fiscal management and called for an immediate end to the practice.
“This ugly situation of running more than one budget at the same time must stop. It is not acceptable in a country that claims to be serious about economic reforms,” Goje said.
Calls for Realistic Budgeting and Better Coordination
Other senators urged the executive arm to submit only realistic budget proposals that align with the country’s actual revenue capacity.
Senator Olalere Oyewumi (Osun West) warned that unrealistic projections only deepen fiscal stress and create a cycle of non-implementation.
Senators Victor Umeh (Anambra Central) and Ireti Kingibe (FCT) also questioned why revenue gaps were not mitigated using borrowings already approved by the National Assembly, particularly for critical infrastructure and capital expenditure.
In response, Senator Musa assured lawmakers that the committee was working closely with the executive to normalise budget timelines and implementation starting from the 2026 fiscal year.
He disclosed that a three-member ad hoc committee would be constituted to liaise with the Ministry of Finance and the Office of the Accountant-General of the Federation to ensure outstanding payments to local contractors under the 2024 budget are settled before the year ends.
FIRS Performance and Revenue Outlook
FIRS Chairman, Zacch Adedeji, told the committee that the service generated ₦20.2 trillion in 2024 and ₦25.2 trillion in 2025, reflecting steady improvements in tax administration and compliance.
However, he noted that the benefits of higher revenue collection were often eroded by the pressure of funding multiple budgets simultaneously.
Adedeji acknowledged that achieving the revised 2026 revenue target of ₦35 trillion would require deeper reforms, broader tax coverage, improved efficiency, and sustained collaboration with other revenue-generating agencies.
Macroeconomic Assumptions for 2026 Budget
Also present at the session were the Minister of Budget and Economic Planning, Senator Atiku Bagudu, and the Minister of State for Petroleum Resources, Senator Heineken Lokpobiri.
They defended the macroeconomic assumptions underlying the proposed ₦54.4 trillion 2026 budget.
Key assumptions include an oil production benchmark of 1.84 million barrels per day, an oil price benchmark of $64.85 per barrel, and an exchange rate of ₦1,512 to the dollar.
The ministers argued that the assumptions were conservative and aligned with prevailing global and domestic trends.
Rising Stakes Ahead of 2026
As Nigeria prepares for another fiscal year marked by economic reforms and revenue pressures, the Senate’s insistence on a higher 2026 revenue target signals a tougher stance on fiscal discipline.
Analysts say the directive underscores the urgency of strengthening revenue mobilisation, curbing waste, and restoring confidence in the budgeting process.
With states heavily dependent on federal allocations and capital projects critical to economic growth, lawmakers warned that failure to address structural revenue weaknesses could worsen fiscal stress across all tiers of government.
The coming months, observers say, will test the Federal Government’s ability to align ambition with execution as it seeks to stabilise public finances and reset Nigeria’s budgetary framework.
