The Nigerian Federal Government has mandated all ministries, departments, and agencies (MDAs) to carry over a significant portion – 70% – of their 2025 capital budget into the 2026 fiscal year. This strategic move aims to prioritize the completion of ongoing projects and manage spending pressures amid concerns about revenue shortfalls.
This directive is formally outlined in the 2026 Abridged Budget Call Circular, issued by the Federal Ministry of Budget and Economic Planning. The circular has been distributed to all ministers, service chiefs, heads of agencies, and other high-ranking government officials in Abuja, emphasizing the importance of strict adherence to the guidelines.
The circular emphasizes that the preparation of the annual budget estimates must adhere to stringent guidelines, with full compliance expected from all officers involved in the budget process. A key provision is the prohibition of introducing new capital projects during the 2026 budget preparations. MDAs are instructed to focus on continuing projects already approved and allocated funding in the 2025 budget, rather than proposing new initiatives. The requirement to upload 70% of the 2025 budget for continuation into the next year underscores this commitment to existing projects, aligning with national priorities.
The decision to roll over a substantial portion of the capital budget is rooted in the government’s assessment of the country’s immediate needs and the administration’s development priorities. These priorities align with the government’s policy direction, emphasizing key areas such as:
- National Security
- The Economy
- Education
- Health
- Agriculture
- Infrastructure
- Power & Energy
- Social Safety Nets, including Women & Youth Empowerment
The government has established a framework setting capital budget ceilings for 2026 at 70% of the 2025 project allocations. Only 30% of the 2025 capital budget will be released within the current fiscal year, with the remaining 70% forming the basis for the 2026 capital budget. This approach replaces the traditional rollover method, ensuring continuity for ongoing projects and eliminating wasteful duplication of efforts. Ministries are specifically instructed not to exceed their 2025 overhead ceilings when preparing their 2026 budget submissions.
While acknowledging the impact of inflation on costs, the government emphasizes that revenue challenges necessitate fiscal constraint. The government intends to maintain efforts to fully release the overhead budget but warns that proposals exceeding approved ceilings will be adjusted downward.
Budget estimates must align with the policies and strategies outlined in the 2026-2028 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF), the government’s pre-budget statement. The MTEF outlines development priorities, and the annual budget must be prepared in accordance with the administration’s policy direction under the Renewed Hope Agenda. This includes initiatives like the Renewed Hope Infrastructure Development Plan, the Ward Development Plan, the National Development Plan, and other programs such as the Accelerated Stabilisation and Actualisation Plan.
All expenditure will be subject to rigorous scrutiny to ensure that only essential spending is approved and that value for money is achieved. The government remains committed to improving the efficiency and quality of spending, as well as strengthening budget formulation, implementation, monitoring, and evaluation processes.
MDAs are required to submit their budgets online using the GIFMIS Budget Preparation Subsystem, while government-owned enterprises (GOEs) must submit theirs through the Budget Information Management and Monitoring System. All submissions must be completed by Tuesday, December 9, 2025. The circular clarifies that budget officers are not authorized to upload submissions on behalf of any ministry, department, or agency. Personnel cost estimates for the 2026 fiscal year have been prepared by the Budget Office based on information from the Integrated Personnel and Payroll Information System (IPPIS) or earlier submissions by ministries. Each ministry will be informed of its personnel cost budget for the 2026 fiscal year.
The financial framework accompanying the circular reveals a tighter revenue position alongside increasing debt service obligations. The amount available for the Federal Government budget, including GOEs, in 2026 is projected at N54.46 trillion, compared to N54.99 trillion in 2025.
- Statutory transfers are projected at N3.15 trillion in 2026, down from N3.64 trillion in 2025.
- Recurrent non-debt expenditure is projected at N15.26 trillion.
- Debt service is expected to increase from N13.94 trillion in 2025 to N15.52 trillion in 2026.
- Aggregate capital expenditure is projected to decrease from N26.19 trillion in the current year to N22.37 trillion in 2026.
This aggregate capital expenditure includes capital supplementation, capital in statutory transfers, special intervention programs, MDA capital expenditure, GOE capital expenditure, grants, donor-funded projects, and project-tied loans. The amount available for MDA capital expenditure is projected to fall from N12.39 trillion in 2025 to N8.67 trillion in 2026, while the volume of project-tied loans is expected to decline sharply from N3.36 trillion to N2.05 trillion. The deficit is projected to increase from N14.10 trillion in the current year to N20.12 trillion in 2026.
The government has stated that the 2026 budget will prioritize ward-based development, infrastructure, security, and stronger domestic production as Nigeria adapts to declining global aid. During a stakeholders’ engagement with the Nigeria International Non-Governmental Organisation Forum in Abuja, Minister of Budget and Economic Planning, Senator Abubakar Bagudu, indicated that the next budget cycle would support the country’s $1 trillion economy target. He explained that the Medium-Term Expenditure Framework (MTEF) approved by the Federal Executive Council outlines the assumptions for the 2026 fiscal year, including revenue projections, production targets, and the new strategy to drive growth at the community level.
