₦airaland Forum

The Federal Government has projected total revenue of N50.74 trillion for 2026, alongside a targeted economic growth rate of 4.68 per cent, while its proposed 2026 deficit has risen so sharply that it now exceeds the entire national budget of 2022 by N2.78tn, The PUNCH reports.

This deficit likely means the government plans to borrow about 16.1 per cent more than what the entire country spent in 2022. The scale of the gap, combined with the high debt service bill, signals a more difficult fiscal year ahead.

Experts noted that Nigeria risks sliding into deeper fiscal stress if the government does not tighten its expenditure planning, boost efficiency and re-establish a credible budget calendar. They warned that rising deficits, unpredictable budget cycles and mounting debt obligations could undercut the fragile economic stability recorded in recent months and heighten pressure on households and businesses in 2026.

This comes after the Federal Executive Council approved the 2026 to 2028 Medium-Term Expenditure Framework and Fiscal Strategy Paper on Wednesday. The Minister of Budget and Economic Planning, Atiku Bagudu, briefed State House correspondents after the meeting and confirmed that the document would be forwarded to the National Assembly on Monday.

Bagudu said the draft was built on a cautious oil price benchmark of 64.85 dollars per barrel and an exchange rate estimate of N1,512 to one dollar for 2026. He explained that the assumptions followed consultations with ministries, private sector operators, civil society groups and development partners.

He revealed that the government adopted dual crude production figures for the first time. The oil industry has been tasked to deliver 2.06 million barrels per day, while a more conservative benchmark production of 1.8 million barrels per day will guide the budget.

The difference provides a safety buffer of 12.6 per cent in case of output disruptions. Bagudu said the benchmark price of $64.85 was lower than what Nigeria usually earns for Bonny Light crude but insisted that caution was necessary

saintopus:
With over N16 Trn for debts servicing alone in 2026 which is more than the entire 2022 budget is indeed

A Budget of Special Concern!!!

Racoon:
All the debt profile burden including the servicing is a heavy economic burden on this nation because these wicked souls have borrowed to mortgage the country into chronic irredeemable financial indebtedness and servitude. God help Nigeria under Tinubu disasterous govt

saintopus:
https://punchng.com/fg-unveils-n54-43tn-budget-as-debt-service-gulps-n15-91tn/

Sheuns:
Exchange rate at 1512naira to a dollar, yet agbadorians have been celebrating 1300 to a dollar in 2025

ijustdey:
Nigeria will pay an interest of 11.85 percent per annum on the $3.3 billion “pre-export finance facility” (PxF) facilitated by the Nigerian National Petroleum Company (NNPC) Ltd and arranged by Afrexim Bank, TheCable can report.

Until now, the fine details of the transaction, which has a five-year tenor, had been withheld by all parties involved.

A similar cocoa-backed $800 million facility arranged for Ghana by its cocoa marketing board attracts an interest of 8 percent per annum.

Bilateral lenders, such as the International Monetary Fund (IMF), would typically charge 1-3 percent with a longer tenor.

In the details seen by TheCable, Nigeria pledged a total of 164.25 million barrels of crude oil — at 90,000 barrels per day — starting from 2024 to repay the loan through Project Gazelle Funding Ltd, an “orphan” special purpose vehicle (SPV) incorporated in Bahamas for the PxF.

Effectively, the NNPC has pledged 38.58 percent of five years’ worth of tax and royalty oil to secure the loan.

Nigeria pledges over $12 billion worth of oil
At the beginning of 2024, a barrel of Nigerian oil was sold at the international market at $77.93 per barrel, according to the Central Bank of Nigeria (CBN) data.

At $77.93 per barrel, the 164.25 million barrels of oil pledged by Nigeria equals $12.8 billion — about three times more than the facility taken.

Pre-2014, the national oil company used to remit an average of $3 billion from oil sales every month.

Officially, Project Gazelle Funding Ltd (PGFL) is the borrower while the NNPC is the “sponsor” and will pay with oil to the SPV to liquidate the loan.

To make the repayment, the NNPC will forward-sell 90,000 barrels per day of Nigeria’s share of offshore crude oil under the production sharing contract (PSCs) with the oil companies.

Under PSCs, the companies usually pay royalties and taxes by giving the oil equivalent to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Federal Inland Revenue Service (FIRS) respectively.

The NNPC in turn exports the oil on behalf of NUPRC and FIRS and remits the proceeds to the agencies.

This is part of the revenues paid into the federation account and shared by the three tiers of government.

But under the PxF, the revenue from 90,000 barrels per day will be used to service the loan in the next five years.

The loan arrangers will get a commission of $66 million or 2% of the facility, TheCable further learnt.

Nigeria will pay 2 percent penalty per annum in the event of a default.


‘DOLLAR LIQUIDITY TO STABILISE THE NAIRA’

The national oil company announced in August 2023 that the PxF was to support the federal government “in its ongoing fiscal and monetary policy reforms aimed at stabilizing the exchange rate market”, describing it as “a relief for the naira”.

It called the facility “crude oil repayment” with an upfront cash loan “against proceeds from a limited amount of future crude oil production”.

At the time, the dollar exchanged for an average of N775 in the official market and N885 on the streets.

The rates have now moved to N1,035/$ (official) and N1,230/$ (parallel).

Nigeria’s outstanding forex liabilities are currently thought to be over $7 billion.

In an explainer after announcing the PxF last year, the NNPC said its exposure is very limited, “covering just a fraction” of their entitlements and that “there are no sovereign guarantees tied to it”.

It said it “will also equip the Federal Government with the necessary dollar liquidity to stabilize the Naira, with limited risk”.

A strengthened naira as a result of the initiative, it said, “will lead to a reduction in fuel costs. This means that if the Naira appreciates in value, the cost of fuel will drop and further increases will be halted”.

It also ruled out subsidies, maintaining that a stronger naira “will result in lower prices from the current level, making subsidies unnecessary. The deregulation policy remains unchanged”.

Critics questioned NNPC’s involvement in getting loans to boost forex reserves when it should be concentrating its efforts on bringing in more oil revenues.

There were also questions over the decision to pledge the tax and royalty oil belonging to the entire federation to secure the loan.

Analysts also queried why the details of the deal were never made public.

https://www.thecable.ng/exclusive-nigeria-to-pay-11-85-interest-on-3-3bn-afriexim-nnpc-loan-pledges-164m-barrels-as-security/amp

anonimi:
World Bank offers Nigeria forex rate advice, as Tinubu eyes N200/Dollar rate

April 23, 2023

The President-elect said he would work with the Central Bank of Nigeria (CBN) to *bring down the exchange rate to N200 in his first term.*

“My administration will collaborate with the Central Bank to harmonize the fiscal and monetary policy to achieve immediate stabilization of the value of the naira against the US dollars and other currencies and in the short term, strengthen the naira by boosting the supply of foreign currency and moderating demand.

“The short-term goal is to achieve a naira/dollar rate of 300 naira/US$ and gradually achieve a less than 200 naira rate over the next four years, Tinubu stated.

https://www.ripplesnigeria.com/world-bank-offers-nigeria-forex-rate-advice-as-tinubu-eyes-n200-dollar-rate/?amp
>>>
>>>

Muhammadu Buhari, presidential candidate of the All Progressives Congress (APC), has promised to ensure that the naira would be equal to the dollar in value if voted into office.

NAN reports that Buhari said this on Monday during the south-east presidential rally of the party at Dan Anyiam Stadium, Owerri.

“It is sad that the value of the naira has dropped to more than N230 to one dollar. This does not speak well for the nation’s economy,” he said.

He urged the people to vote for APC, noting that he would ensure that corruption was tackled headlong if elected.

https://www.thecable.ng/ill-make-naira-equal-dollar-says-buhari/amp

FloatingSky7:
Our budget is way too small

Okeybb:
lol… that’s all bout it!! We doomed .. Been a while since I saw Helinus comment here… hand don meet all of us las las

nairalanda1:
Keep in mind that oil prices are not high enough to stop borrowing

Also, tax income is still very low

Hence the deficit and the borrowing and debt service

This is not a defence of government, but an explanation as to why we are where we are.

To fix it , tinubu must diversify the economy and yes, raise our tax to gdp ratio as well as fight corruption and insecurity

seunmsg:
Another unrealistic N50trillion budget that can’t be funded.

Zico5:
Set of thieves. Despite removal of subsidy, they still continue to borrow without any tangible work to show for it. They still allocate the total money for almost 4 years for subsidy payment. They are using our money to buy luxurious buses and jeeps for the state APC. Eyin nuu olorun nuu

Zico5:
I will not say any bad thing to u. I will rather report u to the mods so that they can ban u for life. The step Tinubu is taking is not a bad one and he has never destroyed any economy. What he is doing is to reposition the country for better and as such there must be prize to pay. He has just started and in few months things will become better. We voted for Tinubu for change and we will stand by him

Zico5:
What's my business with u or Tinubu drug issue. You guys can hold unto that while Tinubu continue to rule over u. After 4 years u will continue ur lamentation again cos Tinubu will rule for another 4 years. Your pain just started