The Senate threatened Thursday to cut the projected 2026 budget of N58.472 trillion. Appropriation Bill due to what it called impractical income forecasts, subpar oil performance standards, and ongoing capital budget implementation issues.
During a heated exchange between the Senate Committee on Appropriations and the federal government’s economic team, senators publicly questioned the veracity of several crucial underlying assumptions in the record budget request.
To lessen Nigeria’s reliance on oil revenue and reposition the Federal Ministry of Art, Culture, Tourism, and the Creative Economy (FMACTCE) as a major force behind economic diversification, the National Assembly previously proposed a N1.5 trillion take-off grant for the sector in a related budget defense development.
When the ministry presented its 2025 budget defense to the Joint Committee on Culture, Art, and Creative Economy, the plan was made public. Throughout the meeting, MPs voiced their strong belief that, with the right structure and investments, the industry can produce enormous amounts of income, jobs, and foreign cash.
According to Hannatu Musa Musawa, Minister of Art, Culture, Tourism, and the Creative Economy, the industry could provide over 2.5 million employment by 2030 and add $100 billion to Nigeria’s GDP.
Senator Solomon Adeola (Ogun West), the chairman of the Senate Committee on Appropriations, questioned the validity of several fundamental tenets of the federal government’s 2026 budget proposal, stating that the budget paper required credible and implementable forecasts and came from the executive branch.
Concerned about what he described as a “recurring gap between projected and realized oil revenues,” Adeola cited examples of performance that fell well short of expectations, such as 18% in one fiscal year and 36.5%.
“What are the reasons for this degree of poor performance?” “What?” Adeola inquired.
He said, “Should we go with making changes or cut this N58.472 trillion budget? If we don’t lower it, you’re assuring Nigerians that you’ll reach these goals.
The legislature would not approve estimates that could exacerbate fiscal constraints, he cautioned, given that Nigeria’s debt stock is over N152 trillion and that debt servicing expenses take up a sizeable amount of revenue.
Adeola proposed that the debt portfolio might be reduced and future borrowing rates may be decreased by strategically selling assets. The National Assembly needed clarification, he emphasized, on whether the revenue statistics were for the federal government alone or the federation as a whole.
Minister of Finance and Coordinating Minister of the Economy Mr. Wale Edun was the first to come under fire, arguing that the benchmark oil production of 1.84 million barrels per day was a “stretch target” intended to spur performance.
“It is a stretch goal so that authorities do not settle for lower output,” Edun stated.
However, he continued, “we are within safe limits as long as we do not spend what we do not have.”
The 2026 proposal, he insisted, had prioritized security spending, revealing that emergency funds had been made available for vital military acquisitions, including those abroad.
“We all agree that security is to be prioritized,” Edun said. Emergency funds have been provided. At least twice this year, including yesterday, significant international payments for security equipment have been made.
Additionally, Edun stated that the high cost of debt for developing nations on global markets was the main cause of Nigeria’s debt problem, rather than the debt-to-GDP ratio.
High interest rates and the sustainability of debt are still major worries at the G24 technical group conference that Nigeria is presently chairing, he said.
With growth of roughly 4%, stronger foreign reserves, improved exchange rate stability, and less inflationary pressures, he claimed the economy was beginning to recover.
The minister went on to say that fresh investor confidence, notably Shell’s reported $20 billion pledge, indicated encouraging momentum.
Dr. Zacch Adedeji, the chairman of the Nigeria Revenue Service (NRS), seemed to partially agree with lawmakers when he warned that erroneous revenue projections will eventually compromise budget performance.
“Budget efficiency is not about the size of the budget, but about what you can implement,” Adedeji stated. We will put ourselves in trouble if we plan with 100 naira when we thought we had 10 naira. Realistic assumptions are the first step.
High production costs have a major impact on net revenue to the federation, Adedeji explained, adding that under the Petroleum Industry Act framework, taxes and royalties rather than gross crude sales currently account for the majority of government revenue from oil.
He revealed estimates that, under the current arrangements, almost 47% of the overall output of oil companies was converted into government money. He urged lawmakers to examine cost structures and implement fiscal restraint.
Additionally, the Senate reexamined their concerns on inadequate capital releases in prior budgets, including the 2024 and 2025 appropriations, which legislators claimed showed little implementation.
In response, the committee received assurances from Dr. Doris Nkiruka Uzoka-Anite, Minister of State for Finance, that the remaining capital portions of the 2024 and 2025 budgets will be completed by March 31, 2026.
Ministries, Departments, and Agencies (MDAs) have been instructed to upload their cash plans in order to facilitate disbursement for 2025 projects, Uzoka-Anite revealed, adding that payments for 2024 capital projects were starting right away.
“The system for financial management is back up and running. However, MDAs need to finish their documentation needs before we can begin,” she stated.
The discussion then transitioned into a nearly two-hour closed-door meeting that was attended by Shamsedeen Babatunde Ogunjimi, the Federation’s accountant general, and Senator Atiku Bagudu, the minister of budget and economic planning.
In the spirit of fiscal realism and sustainable economic management, the Senate indicated at the end of the deliberations that the National Assembly would be forced to reduce the N58.472 trillion budget unless the executive gave stronger revenue guarantees and changed its assumptions.
In the meantime, Senator Mohammed Onawo, the chairman of the National Assembly Joint Committee on Culture, Art, and Creative Economy, stated that the legislature was ready to discuss with Tinubu, under the direction of the National Assembly, the necessity of providing a sizeable seed capital that would allow the ministry to function autonomously and become self-sustaining.
Onawo put the ministry under pressure to figure out how much money it needs to operate without constantly relying on federal grants.
He asked how much take-off grant he would need to become independent if the federal government decided to remove him from the national budget.
There is no way to begin with nothing. We will talk about anything we decide upon here with Mr. President and the Senate leadership.
The committee suggested a N1.5 trillion take-off funding package after discussions, claiming that the tourist and creative industries had vast unrealized potential that may revolutionize the nation’s economy.
Lawmakers argued that the ministry might become one of the government’s biggest revenue-generating organizations with significant institutional improvements, policy clarity, and capital infusion.
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