Nigeria’s Budget Crisis: How Fiscal Indiscipline Became Policy
A Budgeting System in Disarray
NIGERIA’S national budgeting process, once regarded as the backbone of public finance and economic planning, has steadily collapsed into a cycle of disorder, serial revisions and politically expedient assumptions. What should serve as a disciplined framework for allocating scarce resources has instead become a rolling document of optimism, weakened execution and fiscal improvisation.
Analysts describe the situation as entrenched fiscal indiscipline, sustained by a pliant and compromised National Assembly that rarely subjects executive proposals to rigorous scrutiny. Rather than functioning as a corrective institution, the legislature has largely enabled what critics call fiscal rascality, leaving the economy exposed to shocks and arbitrary decision-making.
Rituals Without Discipline
Budget documents such as the Medium-Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP), designed to anchor fiscal discipline, have increasingly been reduced to rituals. Their passage often adds little value beyond adjustments that benefit lawmakers, while fundamental structural weaknesses remain unaddressed.
President Bola Tinubu’s push for the passage of the 2026–2028 MTEF/FSP and the 2026 appropriation bill underscores this pattern. The rolling plan was approved with minimal debate, despite clear evidence that previous budgets consistently failed to meet revenue and capital expenditure targets.
Overlapping Budgets and Policy Confusion
The President’s unusual request for the repeal and re-enactment of the 2024 and 2025 appropriation acts has further deepened concerns. While officially framed as a move to end overlapping budgets, the proposal appears to legitimise the very practice it claims to correct.
Key questions remain unanswered: Is the government extending the lifespan of non-performing budgets? How will overlapping fiscal years affect project monitoring and accountability? A reported directive asking MDAs to roll over 70 per cent of the 2025 capital programme into 2026 has only added to the confusion.
Numbers That Do Not Add Up
Despite achieving 80 per cent revenue performance in 2024, capital expenditure underperformed by 54 per cent, with only ₦6.37 trillion spent out of ₦13.77 trillion appropriated. The 2025 budget appears no better, with capital releases standing at just 17 per cent as of the third quarter.
Contradictions between official revenue figures further undermine credibility, while the proposed ₦58.1 trillion 2026 budget rests on optimistic assumptions about oil production, prices and revenue growth that history suggests are unlikely to materialise.
Debt, Deficits and Shrinking Fiscal Space
The projected ₦23.85 trillion deficit for 2026 signals continued dependence on borrowing, while ₦15.52 trillion earmarked for debt servicing consumes over a quarter of the entire budget. Experts warn this trajectory threatens fiscal stability, crowding out critical investments in growth and social services.
In the absence of structural reform, Nigeria’s budget process risks remaining an elite bargain rather than a tool for national development.
