The Federal Government has instructed ministries, departments, and agencies (MDAs) to postpone 70 per cent of their 2025 capital budgets into the 2026 fiscal year as part of efforts to focus on completing ongoing projects and managing spending pressures due to weak revenue inflows.
This directive is detailed in the 2026 Abridged Budget Call Circular issued by the Federal Ministry of Budget and Economic Planning and circulated to top officials, including ministers and service chiefs, in Abuja.
The circular, reviewed on Monday, emphasises strict adherence to budget preparation guidelines and states that no new capital projects will be introduced in the 2026 budget.
It directs ministries and agencies to continue with allocations approved in the 2025 budget instead of proposing fresh projects. MDAs are required to carry over 70 per cent of their 2025 budget for use in 2026, aligned with national priorities.
The document explains that this rollover reflects the country’s immediate needs and the administration’s development focus, listing priorities such as national security, economy, education, health, agriculture, infrastructure, power and energy, as well as social safety nets, including women and youth empowerment.
According to the circular, “MDAs are to upload 70 per cent of their 2025 FGN Budget to continue in FY2026. All such rollover and uploads MUST be in line with the immediate needs of the country as well as the government’s development priorities that align with the policy direction of the new administration, which hinges on National Security, the Economy, Education, Health, Agriculture, Infrastructure, Power & Energy, as well as social safety nets, women & youth empowerment.”
The circular states that the government has set a capital budget ceiling for 2026 at 70 per cent of the 2025 project allocations. It also clarifies that only 30 per cent of the 2025 capital budget will be released in the current fiscal year, with the remaining 70 per cent forming the base for the 2026 capital budget, replacing the previous traditional rollover method.
This approach aims to ensure continuity of ongoing projects and prevent unnecessary duplication. The document stresses that ministries must not exceed their 2025 overhead budget ceilings when preparing the 2026 budget.
While acknowledging inflation’s impact on costs, the circular notes revenue constraints but promises continued efforts to fully release overhead budgets. It warns that proposals exceeding approved ceilings will be reduced.
The circular states, “MDAs are required to work within and not exceed their 2025 overhead ceilings (Executive Proposal) for the purpose of preparing their 2026 Overhead budget submissions. While we note the impact of inflation on overhead costs, we are, however, constrained by revenue challenges in providing significantly more for overheads. We will, however, sustain the effort to achieve full release of the overhead budget.”
Budget estimates must also reflect policies and strategies outlined in the 2026 to 2028 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP), which serves as the Federal Government’s pre-budget statement.
The MTEF highlights development priorities, and the annual budget must align with the administration’s policy thrust, including the Renewed Hope Agenda, Renewed Hope Infrastructure Development Plan, Ward Development Plan, National Development Plan, and other programmes such as the Accelerated Stabilisation and Actualisation Plan.
Expenditure will be closely scrutinised to permit only essential spending and ensure value for money. The government commits to improving spending efficiency and strengthening budget formulation, monitoring, and evaluation.
MDAs must submit budgets online via the GIFMIS Budget Preparation Subsystem, while government-owned enterprises will use the Budget Information Management and Monitoring System, with a deadline of Tuesday, December 9, 2025.
The circular clarifies that budget officers are not responsible for uploading submissions on behalf of any ministry, department, or agency. On personnel costs, estimates have been prepared based on data from the Integrated Personnel and Payroll Information System (IPPIS) or previous ministry submissions.
Each ministry will be informed of its personnel cost budget for 2026. The accompanying financial framework shows a tighter revenue outlook alongside rising debt servicing costs. The Federal Government budget, including government-owned enterprises, is projected at N54.46tn in 2026, down from N54.99tn in 2025.
Statutory transfers are forecast at N3.15tn in 2026, compared to N3.64tn in 2025, while recurrent non-debt expenditure is expected at N15.26tn. Debt servicing will increase from N13.94tn in 2025 to N15.52tn in 2026.
Aggregate capital expenditure is estimated at N22.37tn in 2026, down from N26.19tn in 2025. This includes capital supplementation, statutory transfers, special intervention programmes, MDAs’ capital expenditure, government-owned enterprises’ capital expenditure, grants, donor-funded projects, and project-tied loans.
MDAs’ capital expenditure allocation will fall from N12.39tn in 2025 to N8.67tn in 2026, while project-tied loans will decline from N3.36tn to N2.05tn.
The budget deficit is expected to rise from N14.10tn in 2025 to N20.12tn in 2026.
Economist and Olabisi Onabanjo University professor, Sheriffdeen Tella, criticised the 2026 budget’s foundation, questioning how a deficit of N20tn was projected when the 2025 budget had barely begun implementation.
He expressed concern that the 2026 budget should be based on 2025’s performance, yet implementation only started in December 2025.
“There is no basis for any budget because what they had, they have not implemented,” Tella said, supporting a rollover of the 2025 plan instead of preparing a new document. He warned Nigeria risked running multiple budgets in the same year, signalling fiscal disorder.
Nigerian Economic Society President, Professor Adeola Adenikinju, also criticised the deviation from the January to December budget cycle, stating that delayed MTEF and FSP approval compromised predictability and economic planning.
Adenikinju said, “The 2026 budget should have been in the National Assembly for consultation so that we can keep to this January 1st thing. That makes our fiscal system predictable.” He warned that a late budget presentation hinders proper scrutiny by the National Assembly.
He added that rushed approvals prevent ministries and departments from adequately defending their plans, leading to a disorganised fiscal environment. According to him, “we are running two or three budgets in the same year,” which “makes the whole process very disorganised.”
Despite criticism, the Federal Government said the 2026 budget will focus on ward-based development, infrastructure, security, and stronger domestic production as Nigeria adjusts to reduced global aid.
Speaking at a stakeholders’ meeting in Abuja, Minister of Budget and Economic Planning, Senator Abubakar Bagudu, said the next budget cycle supports Nigeria’s $1tn economy target.
He explained that the MTEF approved by the Federal Executive Council outlines assumptions for the 2026 fiscal year, including revenue projections, production targets, and a new strategy to drive growth at the community level.
Economists React
Economists gave mixed reactions to the government’s decision to carry over 70 per cent of the 2025 capital budget into 2026.
Dr Aliyu Ilias, a development economist and CEO of CSA Advisory, criticised the move as evidence of poor fiscal discipline.
He argued the decision denied citizens the benefits of projects that should have been completed, stating the government “has failed” and suffers from “fiscal discipline problems.” He questioned how the government could “rule over a budget about 70 per cent” and warned this means “Nigeria’s business has suffered.”
He said stalled capital projects have deprived citizens of services and that the rollover undermines President Muhammadu Buhari’s efforts to maintain a January to December budget cycle.
He warned that the situation opens the door for corruption, questioning oversight of which projects are rolled over or excluded.
Ilias stressed that Nigerians rely heavily on capital projects and delays would cause hardship, calling the situation “an announced suffering.”
He criticised the government’s performance on fiscal discipline as poor and suggested the lapses might be intentional.
He also faulted the National Assembly for failing to provide adequate oversight, accusing it of tolerating inefficiencies.
Dr Muda Yusuf, Director of the Centre for the Promotion of Private Enterprise, supported the rollover, calling it necessary to restore credibility to the budget process.
He described the measure as a way to “normalise things,” arguing it is unrealistic to approve new capital allocations when previous ones remain unimplemented.
Yusuf said the rollover would help fix anomalies and improve confidence in the system.
He linked the issues to broader weaknesses in budget planning and revenue assumptions, emphasising the need for realistic expenditure and revenue alignment.
He said, “We have to be realistic with our expenditure and with our revenue as well.”
