Iran War: FG Eyes Oil Windfall To Fund N9tn Budget Gap
President Bola Ahmed Tinubu on Tuesday asked the National Assembly to approve a N9.09tn increase in the 2026 budget.
The Tinubu’s request, which signals a significant adjustment to the fiscal framework for the coming year, was conveyed in a letter read on the Senate floor by the President of the Senate, Godswill Akpabio, during plenary on Tuesday.
Tinubu explained that the proposed adjustment is intended to enhance fiscal transparency and support the effective execution of key national programmes.
The letter reads, “The proposed adjustment is aimed at strengthening fiscal transparency and ensuring the effective implementation of priority national programmes.”
According to him, the review would allow the government to properly capture existing public debt obligations within the fiscal framework.
The adjustment, Tinubu added, would also provide for a limited number of strategic priority projects while aligning the 2026 financing plan to safeguard macroeconomic stability and reduce pressure on the domestic financial market.
However, the National Assembly passed the 2026 Appropriation Bill, increasing the budget to N68.32tn from the N58.18tn initially proposed by President Bola Ahmed Tinubu.
Analysis shows that adding the President’s N9.09tn request to the original proposal would bring the total to about N67.3tn. This indicates that the approved figure of N68.32tn includes an additional increase of roughly N1tn beyond the executive’s request.
The upward revision, according to lawmakers, is intended to clear legacy obligations, fund key infrastructure, strengthen the judiciary, boost healthcare interventions, and support preparations for the 2027 general elections.
Presenting the report, Chairman of the Senate Committee on Appropriations, Solomon Adeola, said the increase was necessary to address outstanding commitments and align the budget with prevailing economic conditions.
He said the adjustment would “regularise outstanding commitments from previous fiscal years, align the budget with current economic realities and maintain macroeconomic stability.”
Tinubu had originally presented the N58.18tn proposal to the National Assembly on December 19, 2025, under the theme, “Budget of Consolidation, Renewed Resilience and Shared Prosperity,” with a focus on economic growth, security and capital projects.
However, the version approved by both chambers reflects a significant expansion in spending.
A breakdown shows that N4.799tn is allocated to statutory transfers, N15.809tn to debt servicing, N15.427tn to recurrent (non-debt) expenditure, and N32.287tn to capital projects.
The committee explained that the N9.09tn increase followed a formal request from the President to include critical expenditures omitted in the initial proposal and to prevent unresolved obligations from undermining the 2026 fiscal plan.
A major component of the adjustment is the rollover of N7.71tn in outstanding capital obligations from the 2025 budget.
Lawmakers noted that about 70 per cent of capital projects in the 2025 Appropriation Act were affected by revenue shortfalls, necessitating a carryover into 2026 to avoid abandonment and rising costs.
Beyond legacy liabilities, new provisions were introduced for strategic interventions across key sectors.
These include N478.6bn as the Federal Government’s equity contribution under the Ministry of Finance Incorporated framework to support rail projects in Lagos, Kano, Kaduna and Ogun States, as well as feasibility studies for urban rail systems in Enugu and Maiduguri and upgrades to the narrow-gauge rail network.
The committee also approved N8.96bn for feasibility studies on the Calabar–Maiduguri corridor and the Maiduguri–Sokoto superhighway under the Tinubu National Beltway Initiative.
In the health sector, an additional $344.83m, equivalent to about N482.76bn, was allocated for priority interventions under bilateral agreements, aimed at improving healthcare infrastructure and service delivery.
The judiciary received increased funding, including N98.5bn for the Court of Appeal, N36.7bn for the Supreme Court and N268.54bn to restore its budget ceiling and accommodate the appointment of more judges ahead of the 2027 elections.
Lawmakers stressed that strengthening the judiciary was essential to handling election-related disputes and ensuring timely justice.
To finance the expanded budget, the committee proposed a combination of revenue measures and borrowing.
This includes a $10 per barrel increase in the oil benchmark, expected to generate about N2.592tn in additional revenue.
The committee also highlighted improved contributions from the telecommunications sector following tariff adjustments and policy reforms.
It is projected that MTN Nigeria would generate N724bn in company income tax in 2026, while Airtel Nigeria is expected to contribute N150bn, bringing total additional revenue from the sector to N874bn.
Despite these measures, lawmakers approved an increase in external borrowing by N6.163tn to bridge the financing gap, noting that the borrowing remains within manageable limits.
The report stated that the 2026 budget is designed to strengthen macroeconomic stability, improve the business environment, create jobs and reduce poverty.
It added that priority sectors include security, infrastructure, health, education and human capital development.
The committee recalled that the Senate had debated the general principles of the bill in December 2025 before subjecting it to detailed scrutiny, including engagements with the President’s economic team.
It said a public hearing held on February 9, 2026, themed ‘From Budget to Impact,’ drew inputs from government agencies, civil society groups, development partners and private sector stakeholders.
However, lawmakers raised concerns over delays in fund releases and other bureaucratic challenges that affected the implementation of the 2025 budget.
They called for urgent reforms, warning that such bottlenecks could weaken the impact of the 2026 fiscal plan.
The committee recommended stronger collaboration between the executive and legislature, as well as improved oversight to ensure the timely execution of projects.
It also proposed extending the 2025 Appropriation Act to June 30, 2026, to allow for the completion of ongoing projects.
Adeola commended members of the committee and stakeholders for their contributions, noting that collaboration with the House of Representatives ensured a balanced report.
He urged the Senate to approve the revised bill, describing it as critical to sustaining economic gains, addressing structural challenges and setting the country on a path of growth.
Like the Senate, the House of Representatives also passed the N68.30tn Appropriation Bill for the 2026 fiscal year.
At a plenary on Tuesday, presided over by the Speaker, Tajudeen Abbas, the House also approved extending the implementation of the capital component of the 2025 budget from March 31 to June 30, 2026.
Of the proposed total expenditure of N68.30tn, N34.33tn is the projected revenue for the year. Budget deficit is N23.85tn, representing 4.28 per cent of the Gross Domestic Product.
Macroeconomic assumptions of the budget consist of an oil benchmark of $64.85 per barrel, a production target of 1.84 million barrels per day, and an exchange rate of N1,400 to a dollar.
The Federal Government’s share of the main revenue pool is projected at N21.62tn, while the revenue targets for tax and non-tax sources are N124.25tn and N845.98 bn, respectively.
The government also hopes to generate N1.37tn from foreign aid and grants, with government-owned enterprises expected to contribute N10.27tn to the revenue pool.
The Federal Government allocated N618.13bn to the Niger Delta Development Commission, N244.07bn to the North-East Development Commission and N145bn to the North-West Development Commission. The South-West, South-South, South-East and North-West Development commissions had a statutory transfer of N140bn each.
Other statutory transfers include the National Assembly (N577.85bn), the Independent National Electoral Commission (N1tn), the National Human Rights Commission (N20bn) and the Public Complaints Commission (N29.46bn).
Also, domestic debt servicing, including ways and means, got N10.16tn, while foreign debt was allocated N5.36tn.
The presidency was allocated N142.42bn, the Ministry of Defence (N2.69tn), the Ministry of Foreign Affairs (N287.90bn), and the Office of the Head of the Service of the Federation (N17.17bn), among others.
Addressing lawmakers shortly before the passage of the budget, the Chairman, House Committee on Appropriation, Mr Abubakar Bichi, said all amounts appropriated in the proposal shall be released from the Consolidated Revenue Fund of the Federation only for the purpose specified in the executive bill.
On virement, the Kano lawmaker noted that “if the implementation of any of the projects intended to be undertaken under this bill cannot be completed without virement, such virement shall only be effected with the prior approval of the National Assembly.”
He called on the Accountant General of the Federation to “immediately, upon coming into force of this bill, maintain a separate record for the documentation of revenue accruing to the Consolidated Revenue Fund in excess of the oil price benchmark adopted in this budget.”
According to Bichi, “such revenues refer to monies accruing from sales of government crude oil in excess of the approved benchmark price per barrel, the Petroleum Profit Tax and Royalty on Oil and Gas.”
With the Senate similarly passing the budget proposal, it is expected to be transmitted to the President for assent in the coming days.
