The Minister of Finance and Coordinating Minister of the Economy, Olawale Edun, yesterday assured that the N58.472 trillion 2026 Appropriation Bill, in terms of size and assumptions, is within safe limits.
He spoke when he led the economic team to defend the 2026 budget before the Senate Committee on Appropriations.
Members of the team took turns to respond to questions from committee members, led by Solomon Olamilekan Adeola.
Some of the questions centred on whether the size of the budget and its assumptions were realistic, as well as how the 2024 and 2025 budgets would be funded by the end of next month, as proposed.
Other members of the team included the Minister of Budget and Economic Planning, Senator Atiku Bagudu; Minister of State for Finance, Dr. Doris Nkiruka Uzoka-Anite; the Accountant-General of the Federation, Mr. Shamsedeen Babatunde Ogunjimi; and the Chairman of the Nigeria Revenue Service (NRS), Dr. Zacch Adedeji.
Edun said the parameters were well considered and aligned with standard budgeting practices.
He assured lawmakers that the government was exploring ways to boost revenue, drive investments and foster sustainable economic growth.
Oil production benchmark of 1.84 million barrels per day, Edun said: “It is a stretch target so that the authorities do not settle for lower output. But as long as we do not spend what we do not have, we are within safe limits.”
He explained that forward crude contracts are standard practice globally and are structured to ensure future production obligations are met with sufficient margins, warning against leaving commodities idle.
“Some countries that left their commodities underground have seen their value decline over time,” Edun said.
Responding to concerns on debt servicing, Edun said Nigeria’s major challenge was not necessarily its debt-to-GDP ratio, but the high cost of borrowing in international markets.
“The problem is the pricing. Developing countries are forced to pay high interest rates in international markets. That is where the difficulty lies,” he said.
Edun added that Nigeria was currently chairing the technical group meeting of the G24, where debt sustainability and rising interest costs were dominating discussions.
He said President Bola Ahmed Tinubu had called for the establishment of an African credit rating agency to ensure fairer assessments and more affordable financing for African economies.
Edun said security spending had been prioritised, stressing that emergency funding had consistently been released for critical military procurements.
“We all agree that security must be prioritised. I can assure you that emergency funding has been given. Critical foreign payments for security equipment have been made at least twice this year that I know of, including as recently as yesterday,” he said.
He explained that some security expenditures may not be immediately visible under conventional budget classifications, but insisted that urgent obligations were being met through the Federation Account within approved fiscal limits.
Edun said fiscal discipline and monetary credibility were critical to sustaining macroeconomic stability.
“When this administration came in 2023, we were paying heavily to stabilise the system. You cannot undermine interest rate mechanisms without consequences. If you do not maintain credibility, the exchange rate will move,” he said.
According to him, the economy is showing signs of recovery, growing at about four per cent, with inflation trending downward, foreign reserves rising and exchange rate stability improving.
He cited renewed investor confidence, including a reported $20 billion investment commitment by Shell, alongside other private sector investments.
Edun said the government plans to raise investment to 30 per cent of GDP to achieve about seven per cent annual growth and reduce poverty.
Dr. Adedeji cautioned against inflating the budget unnecessarily, noting that unrealistic assumptions would continue to undermine implementation.
“Budget funding must come from realistic projections. Efficiency is not about the size of the budget, but about how much can actually be implemented.
“If you think you have 10 units and spend accordingly, that is manageable. But if you assume you have 100 and spend based on that assumption, you may run into serious problems if the funds do not materialise,” he said.
He noted that budget efficiency lies not in the quantum of the budget, but in what can practically be executed.
Adedeji explained that under the Petroleum Industry Act (PIA) framework, the Nigerian National Petroleum Company Limited (NNPCL) now operates as a limited liability company, and government revenue from oil production comes mainly from taxes and royalties rather than gross crude sales.
“The only connection between the government and whatever is produced is the taxes and royalties paid. If production costs are high, the net revenue to the government is affected,” he said.
He added that projections showed about 47 per cent of total oil company output would translate into government revenue under current fiscal arrangements, urging lawmakers to focus on cost structures and enforceable fiscal parameters.
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