Minister of Finance and Coordinating Minister for the Economy, Olawale Edun, assured yesterday that Federal Government’s current payment system is being improved for improved implementation of the national budget.
He said the outlook for the proposed N58.472 trillion 2026 budget was positive in terms of implementation, as the government has been intensifying efforts to boost revenue inflows to the Federation Account.
Edun stated that the government expects improved remittances by the Nigerian National Petroleum Company Limited (NNPCL) as directed by President Bola Ahmed Tinubu.
The minister spoke during an interactive session between the Senate Committee on Finance and the Federal Government’s Economic Management Team in Abuja.
In attendance were Minister of Budget and Economic Planning, Atiku Bagudu; Chairman, Nigeria Revenue Service, Zach Adedeji; representatives of NNPC Limited; Governor of the Central Bank of Nigeria, Yemi Cardoso and Comptroller-General of Customs, Bashiru Adeniyi, among others.
The minister spoke during an interactive session between the Senate Committee on Finance and the Federal Government’s Economic Management Team in Abuja.
In attendance were Minister of Budget and Economic Planning, Atiku Bagudu; Chairman, Nigeria Revenue Service, Zach Adedeji; representatives of NNPC Limited; Governor of the Central Bank of Nigeria, Yemi Cardoso and Comptroller-General of Customs, Bashiru Adeniyi, among others.
Secretary to the Government of the Federation, George Akume, who gave the directive in Abuja, said such adherence is fundamental to strengthening the credibility and transparency of Nigeria’s budget process.
Akume spoke when the management team of the Fiscal Responsibility Commission (FRC), led by its Executive Chairman, Victor Chinmerem Muruako, visited him.
He stressed that strict compliance with the MTEF by all MDAs was mandatory to safeguard the integrity of the national budget and ensure a coordinated, disciplined fiscal environment capable of supporting sustainable economic growth.
At the interactive session with the Economic Management Team, Edun said projects would go through the approval process based on priorities set by the MDAs, the finance team and the President.
“The prioritisation will be from MDAs first, then the finance team, and then Mr President will have the final say,” he said.
While responding to lawmakers’ concerns on the current payment system, Edun said there would be improvements.
“The payment method will be improved. We should not throw the baby away with the bath water but seek to improve it,” said the minister.
The lawmakers had called for a return to the former payment system instead of the current envelope budgeting model.
Chairman of the Committee Mohammed Musa, in his opening remarks, said feedback from MDAs during the ongoing budget defence sessions showed the need for urgent structural reforms as the 2026 fiscal cycle approaches.
He said: “This meeting is not routine. The 2026 fiscal cycle must reflect not only macroeconomic adjustments, but structural reforms capable of repositioning our economy for sustainable growth, fiscal resilience and development.”
On budgeting, Musa declared that the envelope system had failed and should be replaced with a priority- or performance-based model.
His words: “Specifically, based on submissions made by heads of various agencies during the ongoing budget defence sessions, the envelope system of budgeting has failed and needs to be replaced by priority based model.
“The incremental allocation model has outlived its usefulness. It promotes routine expenditure expansion rather than strategic prioritisation.
“You can see on paper that there is money, but where is the money? If, by December, we cannot assess ourselves realistically, then the system is failing. We must return to a disciplined budget cycle where one fiscal year ends before another begins,” Musa said.
He further stressed that Nigeria must align its budgeting process with global best practices.
The committee chairman said: “Nigeria cannot aspire to global competitiveness while operating a budgeting framework anchored in outdated assumptions. We need to do a new economic outlook. We need to go back like the advanced countries”.
The committee also faulted the current centralised payment system, saying it has left many contractors unpaid for projects already executed.
“Similarly, the centralised system of payment, which has led to many contractors remaining unpaid for projects already executed, should be replaced with the old system, which allows the various MDAs pay contractors they gave jobs to,” Musa said.
Musa warned that delayed fund releases, weak revenue remittances and under-execution of capital projects were eroding public confidence in the budgeting process.
“These patterns widen fiscal deficits, weaken service delivery and erode the credibility of the budgeting process,” he said, insisting that borrowing must translate into productivity, infrastructure development and long-term growth.
Other lawmakers echoed his concerns.
Senator Jimoh Ibrahim called for reforms in revenue management and data infrastructure, lamenting the absence of an integrated national revenue tracking platform.
“How do we monitor revenue when we do not even have a national server? It is not good that we do not have a public service email system, not Gmail, not Yahoo, but official .gov addresses. Every public servant should have an official email, and we must build a central server and data bank. Any economy without data is too weak,” Ibrahim added.
Senator Orji Uzor Kalu urged the economic team to focus more on improving the microeconomic sector to ensure that Nigerians at the grassroots feel tangible economic relief.
Senator Victor Umeh queried the delayed implementation of the 2025 budget, noting that February was almost over without significant capital releases, leaving only a few months for the budget lifespan.
Responding, Edun acknowledged that although government revenue had improved, debt servicing remained a major burden.
“Though revenue has increased, the high interest on debt servicing is draining it. We are servicing debt running up to N152 trillion,” he said, adding that about N30 trillion was inherited from the previous administration, while the current government’s contribution was in the N20 trillion range.”
He added: “Currently, government debt in Naira terms is N152 trillion. About N30 trillion came from Ways and Means inherited by this government and N9 trillion incurred from exchange rate adjustment.
“So virtually half of that debt is made up of adjustments. It is not additional borrowing. Additional borrowing since 2023 is in the N20 trillion range.”
In a statement by Head of Information and Public Relations in the Office of the SGF, Dewan Nengak Goshit, Akume explained that the Medium-Term Expenditure Framework (MTEF) continues to serve as a critical instrument for aligning public expenditure with national development objectives.
He said: “I wish to reiterate that all Ministries, Departments and Agencies must strictly adhere to the provisions of the MTEF. Compliance enhances the credibility of our budget process and ensures that annual appropriations are anchored on realistic macroeconomic assumptions and revenue forecasts”.
He noted that fiscal discipline and consistency remain essential to maintaining macroeconomic stability, reducing waste and leakages, and directing scarce national resources toward sectors that directly improve citizens’ welfare.
The SGF commended the Fiscal Responsibility Commission for its oversight role in monitoring compliance with the Fiscal Responsibility Act across all tiers of government, urging it to further strengthen its monitoring, reporting and enforcement mechanisms.
Akume emphasised that the timely preparation and publication of audited financial statements, budget implementation reports and other statutory disclosures are vital to strengthening public trust and reinforcing investor confidence.
He said: “In an increasingly interconnected global financial environment, Nigeria must continue to demonstrate that its fiscal governance systems are credible, predictable and transparent”.
According to him, the engagement with the Commission provided an opportunity to reinforce the shared responsibility of safeguarding Nigeria’s fiscal integrity and ensuring that public finance management remains sound, transparent and forward-looking.
Earlier, FRC Chairman Victor Muruako expressed gratitude to President Bola Tinubu for what he described as reform-driven leadership under the Renewed Hope Agenda.
He noted that the administration’s commitment to revenue optimisation, expenditure control and fiscal reforms had provided the necessary political backing for the Commission’s work.
Muruako added that the FRC had strengthened regulatory oversight of government-owned enterprises, reinforced compliance with fiscal responsibility principles and safeguarded its institutional independence during periods of uncertainty.
He also thanked the Office of the Secretary to the Government of the Federation for its consistent support and collaboration, particularly during challenging periods.
The renewed directive on MTEF compliance comes amid ongoing efforts by the Federal Government to tighten fiscal governance, enhance revenue performance and improve budget implementation in line with broader economic reform measures.
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