The Federal Government has ordered all Ministries, Departments, and Agencies (MDAs) to carry over 70 per cent of their 2025 capital budget into the 2026 fiscal year. This move aims to curb government spending, prioritize the completion of existing projects, and contain spending pressures due to weak revenues.
The directive, outlined in the 2026 Abridged Budget Call Circular issued by the Ministry of Budget and Economic Planning, strictly prohibits MDAs from proposing any new capital projects in the 2026 submission.
Strategy for Project Continuity
The mandate to roll over 70 per cent of the 2025 budget allocations forms the foundation of the 2026 capital budget. This framework replaces the traditional rollover method.
- Release Schedule: Only 30 per cent of the 2025 capital budget will be released within the current fiscal year.
- Purpose: The OAGF explained that this measure ensures continuity for ongoing projects and helps eliminate wasteful duplication of efforts.
All rollovers must align with the administration’s key priorities, including National Security, the Economy, Education, Health, Agriculture, and Infrastructure.
Fiscal Constraints and Deficit
The circular acknowledged that high inflation is driving up costs. However, it noted that the government is constrained by revenue challenges. MDAs must therefore use their 2025 overhead ceilings when preparing their 2026 submissions.
The financial framework accompanying the circular reveals a tightening fiscal position and rising debt obligations:
- Total Budget: The available budget for the Federal Government (including MDAs and GOEs) is set to fall from N54.99 trillion in 2025 to N54.46 trillion in 2026.
- Debt Service: Debt service obligations are projected to increase from N13.94 trillion in 2025 to N15.52 trillion in 2026.
- Deficit: The projected budget deficit increases significantly from N14.10 trillion in 2025 to N20.12 trillion in 2026.
Expert Critique and Economic Context
The new directive has drawn contrasting opinions from economists.
- Criticism: Some experts faulted the decision, arguing that preparing the 2026 budget when the 2025 budget implementation has barely begun is fiscally irresponsible. Professor Sheriffdeen Tella noted that this anomaly breaks the continuity efforts of previous administrations and risks encouraging abuse.
- Support: Conversely, Dr. Muda Yusuf supported the rollover, calling it a necessary step to restore credibility to the budget process. He argued it is unrealistic to approve fresh capital allocations when previous ones remain unimplemented.
The deadline for all MDAs to submit their 2026 budget online is Tuesday, December 9, 2025.
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